A Simple Basic Future Contract Question

flyingdutchmen · #1 07-01-2009, 11:49 PM

a simple basic future contract question
ahumm...
thats what i tought

we all know trading future contracts is a zero sum game
as there should allways someone be prepared to buy a
contract in order for you to sell it and visa versa...

is it possible that your broker takes the opposite of your
trade in order for you to buy a certain future contract
or is this only done by other market participants ?

i guess not wouldnt be logical to short a contract in
order for me to go long on that same contract?

does it mean someone else is willing to EXIT/CLOSE
his existing long(?) contract so i can buy it from him?

i feel kind of embaresed to ask this as i trade future's
on a daily base

what am i missing

prash454 · #2 07-02-2009, 01:24 AM

Originally Posted by flyingdutchmen

a simple basic future contract question
ahumm...
thats what i tought

we all know trading future contracts is a zero sum game
as there should allways someone be prepared to buy a
contract in order for you to sell it and visa versa...

i guess not wouldnt be logical to short a contract in
order for me to go long on that same contract?

does it mean someone else is willing to EXIT/CLOSE
his existing long(?) contract so i can buy it from him?

i feel kind of embaresed to ask this as i trade future's
on a daily base

what am i missing

is it possible that your broker takes the opposite of your
trade in order for you to buy a certain future contract
or is this only done by other market participants ?

If its Forex, yes your broker maybe trading against you. But he will himself not be naked but hedge himself elsewhere.

In general stock futures, your order generally flows to the exchange where matching happens. Even if your broker wants to take a contra trade against you, he too will have to take the trade at the exchange and hence it makes no difference who the counter party is.