Trading futures and options on the major commodity and stock exchanges is fun and not too complicated, and can be very profitable. All you have to do is open up a stock and option trading account at a brokerage and once you get your account funded, then you are ready to go.

Futures trading does require greater liquidity, and you do have to have your account approved to trade futures, but it is not a big deal and you don't have to be rich. The first step in trading options and futures is setting up an account at a brokerage house. You can do this by telephone or by mail, but it is very simple and easy to do with a computer with an Internet connection and ideally you will want to trade from your account at home and not have to rely on calling a broker to make trades.

Today, almost all major brokerages offer comparable rates and services, but you should shop around as there are often nice promotions like free trades or a small cash bonus for opening an account.

The next step is funding your account. The next step is research. So if the stock price goes up after you buy the call, then your option will also increase in value, but if the stock price goes down, then your call will lose value.

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It is the same principle with futures, except that you are buying a contract to buy a certain amount of a commodity soybeans for example at a specific time point in the future, and your futures contract will lose value or gain value depending on the price of that commodity over time.

The most important concept to keep in mind with both options and futures is time value. You only have the right to buy that stock or commodity for a limited period of time, and the value of the option or future contract will erode slowly over time even if the price of the underlying stock or commodity stays the same. However, if there is no significant change or it goes the opposite direction from what you thought, you can lose your entire investment.

Whether the economy is hot or not, an investor can make money trading commodity options, regardless of the condition of the market The futures market is one of the fastest-growing investment opportunities available today.

Volume in futures trading is at a record high. By Clayton Browne eHow Contributor.

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Can a Small Business Invest in Stocks? How to Form a Commodity Trading Firm. How to Set Up a Stock Trading Account. How to Trade Options With Your IRA Account.

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