Episode 2 — Futures and options: What pros know, and you should too

Futures and options have long been associated with Wall Street professionals and institutional traders, but that perception is rapidly changing. In the second episode of Money Reimagined: Investing for the Next Generation, Rostro’s Managing Director of Futures & Options, Saul Knapp, explains why these instruments are more relevant and more accessible than ever before.

Speaking with host Lachlan Kitchen, Knapp points out that futures and options are not new or overly complex. In fact, they date back hundreds of years, originally used by farmers to hedge against price fluctuations. Today, they remain essential tools for managing risk, generating income and speculating on price movements across global markets.

He explains that a futures contract allows investors to buy or sell an asset at a fixed price at a future date, while an option gives them the choice, but not the obligation, to do so. While options can be more complex, Knapp emphasises that futures themselves are among the most straightforward trading instruments, often comparable to trading shares or contracts for difference.

One of the biggest shifts in recent years is accessibility. What was once confined to trading floors and manual processes has moved entirely online. Now, with the right platform, individual investors can access the same global exchanges as professionals.

This accessibility is fuelling growing interest among younger investors. According to Knapp, Gen Z’s comfort with technology, combined with the appeal of flexible, location-independent trading, is driving uptake. However, he stresses that while the tools are accessible, success is far from guaranteed.

Discipline, research and emotional control remain critical. Traders must understand what drives the assets they are trading, whether commodities like gold and oil, or indices such as the S&P 500, and avoid impulsive, emotion-led decisions. “The hardest part to manage as a trader is yourself,” Knapp says, warning that emotional trading often leads to losses.

Looking ahead, Knapp believes the futures and options market is entering a new phase of growth. With exchanges introducing smaller contract sizes and platforms like Rostro lowering barriers to entry, these once-exclusive instruments are becoming viable for retail investors, offering a powerful way to understand and navigate global markets.