Trading Commodity is one of the most popular ways to speculate in one of the most dynamic markets in the world.
Commodities are known as the fundamental building blocks of the global economy.
They are natural resources traded on dedicated exchanges around the world.
There are two types of commodities – soft and hard. Soft commodities are typically agricultural like wheat or sugar, whereas hard commodities are metals or energies like gas, gold and silver.
The production and consumption of commodities depends on many factors, including:
As a result of changes in one of more of these factors, prices of the commodity can fluctuate significantly, thou commodity prices are not as volatile as other asset classes which offers you Trading opportunities.
Commodities trading is an enormous popular way to trade the financial markets.
The most common way for trading commodities is to buy or sell a futures contract. The price of a commodity futures contract is standardized, meaning the underlying instrument’s quantity (pound, ounce, barrel, etc.) is predetermined and appears the same for all market providers. A “futures contract” also obligates the holder to buy or sell a commodity at a predetermined price on a delivery date in the future.
Contract expires before the underlying future contract expiration day, eliminating the possibility of physical delivery.
Commodities are also generally traded as futures contracts. These are simply agreements to trade an asset at an agreed price and date in the future. This enables you to trade the contracts themselves without ever having to own the underlying asset.
In general, when bonds and stocks fall, the prices of commodities rise. Therefore, commodities can be used to hedge our portfolio.
You can trade commodities such as precious metals, crude oil and natural gas among our range of trading products that will match your individual trading style and level of experience. Trading commodities is the perfect way to diversify your portfolio as commodity prices are generally less influenced by changes in stock markets.
HIGH RISK INFORMATION AND NOTICE: Trading foreign exchange (FX) and precious metals carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and the possibility of loss. Before deciding to trade, carefully consider your investment objectives, level of experience, and risk tolerance.
DISCLAIMER: Currency trading involves significant risks and is not suitable for all investors. The possibility of significant losses should also be taken into account. It is important to understand all possible consequences associated with investing. Traders should weigh their earning potential against the risks involved and act with caution.
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