Why Investors Need to Trade Futures

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (TheLFB-Forex) -- Equities, currencies, oil, bullion, and Treasury yields are all being affected by midsession cash market moves that fail to follow through in the proceeding session. It's back to the January opening prices for S&P 500 as the up-and-down moves continue.

As boring as it seems, regurgitated headline news and volatile reactions continue to dominate the daily process of finding fair value. No new signals are forming either long or short on global asset classes. The EU Summit and global interest rate decisions will be key. Last week's surreal economic releases printed 3 standard deviations higher than expected, which will now be subject to revisions next month.

Traders who are not connected to the 24-hour global market can find it frustrating to wait for regional cash markets to open.

It is becoming clear that as much price action occurs in the futures market as in the regional cash market, and those traditional investors who are standing on the outside looking in while the futures trade adjusts to daily swings in fair value may be constantly missing the bulk of movement on any given day.

In the wake of the financial crisis, the market seems to have a short attention span, and much trading is algorithm-driven. We now see in one day trading action that once would have taken place over one month.

The consequence has been the evolution of a new breed of global market trader that understands and trades a range of asset classes and is willing to change tack on short notice in reaction to changing market dynamics.

New-generation traders focus on international markets, and how market correlations can be traded ahead of the 9-to-5 cash markets via futures contracts. These traders are able to use 24-hour market access and cross-border trading patterns in different asset classes to complete their work before regular traders even start to read the news headlines.