CHICAGO, Ill. — Amateurs and professional traders alike are welcome to the newly launched CME Group Futures Institute, an online platform geared toward futures education, trading simulation and market research.
The Institute is a website anyone can access and use free of charge to learn about and practice trading in futures markets. It is not designed to try to persuade people to use futures, but to produce educational resources for those interested in learning more about them, according to Mark Omens, senior director of retail sales for CME Group.
"Farmers or anyone in general can use the futures market to try to just profit from moves up or down, or to hedge the risk in their business," Omens explained. "It’s like with stocks. If you think something’s going to go up in price, you can buy it, or you think the price is going to go down, you can sell it. So, like with stocks, you can try to profit as the market moves up or down."
The Futures Institute offers a blend of live instruction, interactive training modules, market research and training. Through the interactive target website, participants learn about the futures markets and are exposed to numerous trading strategies with the ability to test them out in the simulated trading environment, according to CME.
The Institute works with partners across the industry to distribute best-in-class education aimed at providing market participants with the knowledge and resources to trade futures. Also, practice training is offered in a simulated environment so trainees can get comfortable with trading those markets, Omens noted. "Our goal with the Futures Institute is to provide a centralized place for traders to enhance their skills and education on futures and options on futures," Bryan Durkin, CME Group’s chief commercial officer, stated. "We are pleased with this additional opportunity to actively engage with current and new traders of all types, providing them with the tools and resources needed to discover opportunities and enhance their trading of futures."
Participants also can enter a Futures Challenge with fellow traders. The challenge provides them with the ability to trade 36 of the most liquid futures contracts across six asset classes; Equity Indexes, Energy, Metals, FX, Interest Rates and Agriculture.
While competing, traders will be exposed to training modules covering a variety of topics including building a trade plan, risk management and technical and fundamental market analysis.
"For individuals today who are actively trading those markets, our goal for those looking for additional opportunities outside of traditional asset classes, is to interest them in the world of futures and opportunities out there," Omens said. "Then, if they are interested in learning more about or trading those markets, our goal is to try and provide them the proper foundation from an educational standpoint of truly understanding the futures market, how they work, what products make up the futures market, what drives those markets and how does fundamental analysis and technical analysis affect pricing."
If someone were watching the price of corn and thought it would go higher or lower in the near future and wanted to put their money in a market to try to take advantage of the movement or to hedge their risk in corn if they are farming, the futures market can offer opportunity to do that. This is what is meant by trading, Omens noted. "When you go (into the market) and buy and sell corn, you are actually trading corn. Trading is buying and selling individual markets," he said. "A farmer knows what it cost to grow his corn. If he’s concerned the price on the open market could possibly be less than what it cost him to grow his crop, he may look to use the futures market to hedge his crop and try to lock in a certain price. If it cost him $4 to grow his corn, and it’s only $3 when he goes to sell it, he could potentially lose $1 on that.
"If the farmer was concerned that the price of corn could go down, he could buy insurance on it by using the futures market," Omens pointed out. "If he had to sell it in the open market for $3, he would hope to use the futures market to potentially make up that extra $1 by his position in the futures market. In general, a farmer or individual can use the futures market to try to just profit from moves up or down, or use the futures market to hedge the risk in their business, like being a farmer."
