Derivatives Trading for the Masses

By now, millions of Americans have several years' experience trading their online accounts. As such, it seems inevitable that growing numbers of these folks will want to graduate from plain old stocks to the high-octane risks and rewards offered by derivatives trading.

At least that seems to be the thinking behind two new online brokerages I looked at this week, optionsXpress and MyFuturesOnline.com. Both brokerages seem aimed at bringing derivatives trading to the masses.

Derivative products like options and futures give traders control over an asset -- stocks in the case of equity options; metals, currencies and a long list of other commodities in the case of futures -- for a small fraction of that asset's actual cost. That massive leverage is what makes derivatives both enticing and potentially dangerous. Trading options and futures, it's possible to lose more money than you invested. If you're a newcomer to either, check out the Chicago Board Options Exchange and Chicago Mercantile Exchange's educational Web sites on options and futures. ...