Who says cash can’t be fun?  

Yesterday, in the morning post, I noted the weak volume rally was a good shorting opporunity in the Futures – specifically the Russell (/TF) at 1,190 (pictured here, now 1,170 for a $2,000 gain!) and the Nikkei (/NKD) at 19,800 (now 19,635). The Russell was good for a very quick $1,000 per contract gain and has hit $2,000 as of this morning (where we’re done for now, expecting a bounce here) while the Nikkei took longer to grind out it’s $1,000 win at 19,600 before bouncing back.  

A lot of traders have an irrational fear of trading the Futures (and options, for that matter) and it’s one of the things we work on in our Weekly Webinars (replay available here). The cost of initiating a Russell Futures Contract is $5,940 in margin (may vary by broker) and you simply bet long if you think the Russell will go higher or short if you think it will go lower and then you make (or lose) $100 for each point the Russell moves.  

The very great thing about the Futures is that you can play them in off hours, like yesterday morning – when we saw the Futures market rising for bad reasons ahead of what we thought would be a weak open based on the data that was coming in. My comment at the time was:

The volume on yesterday’s move up was a joke and this morning we’re being pushed even higher in the Futures, back to 1,190 on the Russell (/TF) and 19.800 on the Nikkei (/NKD) along with 2,085 on the S&P (/ES), 17,800 on the Dow (/YM) and 4,660 on the Nasdaq (/NQ).  I listed the Russell and Nikkei first as they are going to be our key shorts – providing the others stay below their lines.

That’s the real key to playing the Futures (and it’s not very different with stocks or options) – pick a strong support or resistance line where several factors line up that lead you to take a stand and then, once you make your bet – get out quickly if things don’t go the way you plan. By limiting your losses, you live to play another day and, as you can see – the payoff from a single winner can make up for quite a few losses.  

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