Basic Commodity Information
If you are interested in trading commodities you will need some basic commodity information and then Commodity and Futures Training. Commodities are traded on commodities marketssuch as the New York Mercantile Exchange and the Chicago Board of trade, both part of the COMEX group. Traded commodities include agriculture products, fossil fuels, metals, and financial instruments. Commodity futures trading allows commodity producers and buyers to hedge their positions and allows traders to speculate in the commodities markets. Starting with basic commodity information traders can use technical analysis tools such as Candlestick chart analysis to anticipate the futures markets in commodities and earn substantial profits.
Commodity trading takes place on a formal commodity market where commodities are traded in standard lot sizes. Traders post a bond in order to trade and pay fees for the privilege. In general traders buy and sell futures contracts. These contracts specify that one individual will buy and one will sell a specific quantity of the commodity on a given date. Traders can alsotrade options on commodity futures. Options trading of commodities offers the option to buy or sell but not the obligation, unlike pure futures trading. An individual buying calls or buying puts on commodities incurs the cost of the premium but does not lock himself or herself in to buying or selling copper futures, corn futures, or live cattle.