Need To Know Articles
17
Tips On Commodity Investing
Tag: Stock Market — John Spencer @ 6:57 am
Commodities are physical articles of commerce that are traded in authorized commodity markets. Some examples of commodities are agricultural products, petroleum, metals, foreign currencies and financial investments. In the beginning, commodity markets were used for trading of agricultural products in local markets. Today commodity markets have broken country barriers with technological advancements, industrialization of good and globalization to reach the world.
by John Spencer
Commodities are physical articles of commerce that are traded in authorized commodity markets. Some examples of commodities are agricultural products, petroleum, metals, foreign currencies and financial investments. In the beginning, commodity markets were used for trading of agricultural products in local markets. Today commodity markets have broken country barriers with technological advancements, industrialization of good and globalization to reach the world.
There are certain rules that one has to follow when you are trading in commodities. First, the trading is to be done only for standard products. Second, commodities transactions take place through the use of “futures contracts.” This is where commodities are actually bought or sold on the future date. Even though the transaction technically takes place at a later date, the commodity’s selling price is the price that is agreed upon when the contract is made.
You can also trade commodities through something called a “spot contract.” This type of contract means that commodities are transferred when the contract is made instead of at a future date. This is done to exercise a future contract after some time has passed. Some of the more common areas of commodities investing include commodity petroleum, commodity fund investing, and the commodity food market.
When commodities investing began, it was done only in a few sectors. It was also restricted to commodities that were meant for everyday, regular use. Today, anyone who wants to trade in commodities can do so.
If you decide you want to invest in commodities, you should know that one of their advantages is reduced risk. Commodities investment can help you even out losses that might occur in other areas you’ve invested in. Commodities can offer less risk because when you deal with commodities, you invest in a number of items. Because you are using futures contracts, you can also more easily ensure that the risks you take are much lower than they might be, so that you can reduce or even eliminate risk.
It is easy to monitor the performance of commodities on the commodity market. This is because the commodity market usually performs well when other stocks and shares don’t perform well; and vice versa. With this rule, it is easy to predict the prices of commodities and thus consider the ups and downs of the market. However always remember to never correlate the commodity market with the stock and bond market.
If you want more advice on trading commodities, you can ask commodity-trading advisors. These firms or individuals can help you determine whether you should establish a long or short position in the commodity market. They can also tell you when you should liquidate your position. They can also advise you as to how your goals fit with their particular strategies and philosophies in trading.
When choosing the best commodity trading advisor, choose the one who trades in a manner suiting your goals and objectives. The advisor can advise and communicate with you through emails, phone, pager, fax or a recorded message..When you don’t feel comfortable trading commodities yourself you can always invest in an investment fund that has several different commodities in their trading portfolio.
About the Author:
If commodity trading on your own is not for you then you might like this Investment Fund
Click Here To Read More Of This Article
Lastest posts in Stock MarketStock Market: Can You Invest Direct and General UtilitiesThere are companies that allow an investor to purchase stocks directly from the ...http://need-toknow.com/2008/03/12/stock-market-can-you-invest-direct-and-general-utilities/Horizon Asset Management - Personal InventoryWithout a proper management system, our lives can not function as efficiently as...http://need-toknow.com/2008/03/10/horizon-asset-management-personal-inventory/horizon asset management: a guide to your investment optionsThe process of accumulating wealth is hard to understand for most people. It is ...http://need-toknow.com/2008/03/03/horizon-asset-management-a-guide-to-your-investment-options/The Advantages Of Investing In The Stock Market - Part 1In my previous articles, I gave a comprehensive introduction on how to invest in...http://need-toknow.com/2008/02/02/the-advantages-of-investing-in-the-stock-market-part-1/Why You Should Invest In The Stock Market - Part 2Last time we discussed about the advantages or the reasons why you should invest...http://need-toknow.com/2008/02/02/why-you-should-invest-in-the-stock-market-part-2/How To Trade With Free Stock Market Game Online ApplicationIf you're raring to have a go at stock trading but you don't know a thing about ...http://need-toknow.com/2008/02/01/how-to-trade-with-free-stock-market-game-online-application/Revenge Of The Penny StocksThere has been a lot of talk about how 2008 will turn out financially. The word ...http://need-toknow.com/2008/01/11/revenge-of-the-penny-stocks/The Vat Setup For Stock And Option TradingThere is a unique pattern that forms in the price action of momentum stocks that...http://need-toknow.com/2008/01/10/the-vat-setup-for-stock-and-option-trading/Review Of Dan Zanger's Chart Pattern. Is Chart Pattern For Real?If you like learning how to trade, while being given great trading advice, Dan Z...http://need-toknow.com/2008/01/08/review-of-dan-zangers-chart-pattern-is-chart-pattern-for-real/Stock Market - Basic Principles - Part 4 Of 4In this article we will be discussing the last three principles of investment in...http://need-toknow.com/2008/01/07/stock-market-basic-principles-part-4-of-4/How To Read Stocks Without Being An Investment GeniusIf you're just starting out learning how the stock market works, reading the sto...http://need-toknow.com/2008/01/05/how-to-read-stocks-without-being-an-investment-genius/Basic Investment Principles In The Stock Market - Part 3 Of 4In part three of this four part series we will be discussing the next four princ...http://need-toknow.com/2008/01/04/basic-investment-principles-in-the-stock-market-part-3-of-4/Stock Market - Basic Principles - Part 2 Of 4This the second part of the series on the discussion of principles of investment...http://need-toknow.com/2008/01/04/stock-market-basic-principles-part-2-of-4/
Leave a Reply
You must be logged in to post a comment.
for this post
Leave a Reply