This chapter applies futures mechanics to directional trading. It covers gross and net profit or loss, return on margin equity, spread calculations, and the order choices used to enter or protect a position.
What You'll Learn
| Unit | Focus |
|---|---|
| Profit and Loss Calculations | Outright and spread P/L, commissions, and return on margin equity |
| Trading Applications | Matching a market view to a trade and choosing protective orders |
Chapter Strategy
For every calculation, write the position direction, price change, contract multiplier, contract count, and commissions before doing arithmetic. For a protective stop, distinguish its trigger from its actual fill price.