It is the availability of leverage that creates the perception of volatility, and it is primarily the use of leverage that creates the risks associated with trading futures and forwards. However, leverage can also be a valuable tool. It is the controlled use of leverage and prudent risk management that has enabled attractive risk-adjusted returns. Many futures price movements have been non-correlated. Futures contracts are available on a wide range of physical commodities and financial instruments, including stock indices, but the price movements between different futures market sectors are often non-correlated.
Futures accounts earn interest.
Unlike traditional investments, futures investors are not required to borrow money in order to obtain leverage. Instead, margin deposits are maintained in cash equivalents, such as U.S. Treasury bills, and earn interest. In fact, interest may be earned on most of the investor's available assets, including unrealized profits. Futures and forward markets offer global diversification. Futures and forward contracts are traded in many countries, which makes it possible to spread risk and participate in potential profit opportunities around the world.