Futures Trading: Key Terms

Futures Contract

• What: An agreement to buy or sell an asset (like stocks or oil) at a set price on a future date.

• Why It Matters: PRODIGY 1 trades futures daily on S&P 500, NASDAQ, Russell 2000, 30-year Treasury notes, and gold, buying and selling to limit risk. Each day, our AI reviews 6.8 billion data points per commodity to decide trades—no physical assets involved.

Underlying Asset

• What: The item tied to the futures contract—like the S&P 500 index or gold.

• Why It Matters: PRODIGY 1 uses diverse assets to profit from price swings.

Leverage

• What: Using a small investment (like $55K) to control a larger position ($325K+).

• Why It Matters: Boosts PRODIGY 1’s returns—why $255K net is possible—but adds risk.

Margin

• What: The deposit to open a futures trade—often 5–10% of the contract’s value.

• Why It Matters: PRODIGY 1’s $55K includes a $12,500 fee as part of this.

Long Position

• What: Buying a contract expecting the price to rise.

• Why It Matters: PRODIGY 1 goes long in up markets for gains like $255K net.

Short Position

• What: Selling a contract expecting the price to fall.

• Why It Matters: PRODIGY 1 shorts in down markets (e.g., $61K edge since 12/18/24).

Settlement

• What: Closing a contract—usually cash profit/loss, not physical delivery.

• Why It Matters: PRODIGY 1 settles in cash at 12 months or $400K gross.

Maturity/Expiration

• What: The date a contract ends and settles—often monthly or quarterly.

• Why It Matters: ProfitVest AI resets it’s trades daily, long before settlement. 

Hedging

• What: Using futures to offset price risks—like locking in costs.

• Why It Matters: PRODIGY 1 speculates, but stop-losses act like a hedge.

Speculation

• What: Betting on price moves for profit, not to use the asset.

• Why It Matters: PRODIGY 1 speculates to turn $55K into $255K net.

Tick Size

• What: Smallest price change in a contract (e.g., $10 for S&P minis).

• Why It Matters: PRODIGY 1 tracks ticks for precision gains.

Mark-to-Market

• What: Daily adjustment of profit/loss on your position.

• Why It Matters: Keeps PRODIGY 1’s trades transparent via brokers.

Stop-Loss

• What: Auto-sell order to limit losses if prices drop too far.

• Why It Matters: PRODIGY 1 uses these to cap downside risk.

Volatility

• What: Price swings in the market—big or small.

• Why It Matters: PRODIGY 1 thrives on volatility, up or down.

Open Interest

• What: Number of active futures contracts.

• Why It Matters: Shows market activity PRODIGY 1 taps into.

Mini Contracts

• What: Smaller futures contracts (e.g., 1/10th of standard size).

• Why It Matters: PRODIGY 1 uses minis (S&P, NASDAQ) for flexibility and lower cost.

Micro Contracts

• What: Even smaller contracts (e.g., 1/100th of standard size).

• Why It Matters: Future PRODIGY 1 upgrades may use micros for finer trades.

Tick-by-Tick Tracking

• What: Monitoring every trade’s performance in real-time, down to 10-second intervals.

• Why It Matters: PRODIGY 1 tracks trades every 10 seconds to trigger stop-losses, enable future intraday trading, and let investors watch gains live with graphs on our site.

Liquidity

• What: How easily a contract can be traded without price impact.

• Why It Matters: High liquidity in minis powers PRODIGY 1’s efficiency.

Futures Exchange (CME) & NinjaTrader

• What: The Chicago Mercantile Exchange (CME) is where futures trade; NinjaTrader is our platform for executing and monitoring trades.

• Why It Matters: PRODIGY 1 operates on CME via NinjaTrader for speed and reliability.