1. Introduction to Stock Trader Types
  2. Stock Traders’ vs. Stock Investors' Roles in the Marketplace
  3. Decision-Making Methods: Informed, Uninformed, Intuitive
  4. Informed Traders: Fundamental Traders, Technical Traders
  5. Swing Traders
  6. Buy and Hold Traders
  7. Value Traders
  8. Trend Traders
  9. KISS Traders
  10. Momentum Traders
  11. Range-bound Traders - Break-out Traders - Channel Traders
  12. Options Traders
  13. Options Seller Traders
  14. Day Traders
  15. Pattern Day Traders
  16. Intra-Day Traders
  17. Intra-Day Scalp Traders
  18. Contrarian Traders
  19. Active and Passive Traders
  20. Futures Traders
  21. Forex Traders
  22. Online Stock Traders
  23. Pivot Traders
  24. News Traders
  25. Noise Traders
  26. Sentiment-Oriented Technical Traders
  27. Intuitive Traders
  28. Price Action Traders
  29. Price Traders
  30. Detrimental Traders
  31. Unsuccessful Types of Stock Traders
  32. Conclusion

Futures are financial contracts which provide the buyer the obligation to purchase an asset (or, alternately, the seller an obligation to sell an asset) at a set price and at a particular future point in time. Futures traders can be divided into four broad categories. Futures traders can usually be grouped into these categories regardless of the area in which they focus; the types of futures traders are actually classified according to the purpose of their trades rather than the actual trading strategy itself. These categories are:

1. Hedgers

Hedgers use futures contracts to hedge against price risk. Traders who go short on futures contracts while they own the underlying asset or a different set of futures contracts for a related product are known as hedgers.

2. Speculators

Futures speculators are among the most common types of futures traders active today. They help to generate liquidity in the futures trading market buy day trading in this area. Of course, with greater degrees of activity, these traders also often take on higher levels of risk, as the price of an underlying asset might change unexpectedly.

3. Arbitrageurs

Arbitrageurs are traders operating in the futures space who aim to find price anomalies between the futures contracts and their underlying assets. They hope to use these differences in order to reap risk-free returns. These traders also provide liquidity and volume to the futures market, as most arbitrageurs are affiliated with a big fund and have large trading volume.

4. Spreaders

Spreaders are those futures traders who specialize in trading futures in combination with other futures or with underlying assets. They aim to reduce risk and extend profitability. These complicated, multi-security positions are known as “futures spreads.” Spreading is a highly-specialized field with less activity than some of the other trends seen above.

Assets traded in futures contracts include commodities, stocks, and bonds. Hedgers tend to focus on stocks and bonds, while speculators are usually more interested in the future prices of particular commodities. They will often buy a futures contract when they disagree with the broader consensus on a future price of the commodity or stock in question.

Because futures contracts are standardized, trading in commodities is easier to do than it would be if prices were different for various producers and subclassifications.

Futures trading is a zero-sum game; for each winner, there is a loser. Because futures contracts may be purchased on margin, these traders have huge amounts of leverage, and they can either win big or lose significantly, depending upon their ability.

 


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