Trading Commodity is one of the most popular ways to speculate in one of the most dynamic markets in the world.
Futures Trading is the buying or selling of futures contracts that are agreements to deliver (or take delivery of) an underlying product at a certain delivery date and therefore, these contracts expire.
Futures contracts cover instruments such as:
There are many types of futures contract to trade. They include:
Some things to consider before trading futures:
Leverage: Control a large investment with a relatively small amount of money. This allows for strong potential returns, but you should be aware that it can also result in significant losses.
Diversification: Access a wide array of investments including oil and energy, gold and other metals, interest rates, indexes, grains, livestock, and more.
After Hours Market: Futures markets trade at many different times of the day. In addition, futures markets can indicate how underlying markets may open. For example, stock index futures will likely tell traders whether the stock market may open up or down.
Liquidity: The futures market is very active with a large amount of trading, especially in the high-volume contracts. This makes it’s easier to get in and out of trades.
Hedging: If you have an existing position in a commodity or stock, you can use a future contract to protect unrealized profit or minimize a loss. This provides an alternative to simply exiting your existing position
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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