Understanding the Basics of Commodities
Investing in Commodities
Most people have heard of commodities, but they have no idea of how to invest in them. The mere thought of trading commodities scares them away in an instant. Commodities carry some type of stigma that often makes people think they are too exotic or too dangerous for investment purposes. Where people see fear, others see opportunity. It is...
What Commodities Can You Trade
There are developing political, economic and weather issues occurring everyday around the world that causes prices of commodities to move higher and lower. While opportunities seem endless to make money in commodities, only select commodities are available for direct investment.
Hedging in Commodities
A hedger is basically a person or company that is involved in a business related to a particular commodity. They are usually a producer of a commodity or a company that needs to purchase a commodity in the future. Either party is trying to limit their risk by hedging in the commodity markets.
What are Commodities
The simplest answer to the question what are commodities is - commodities are the raw ingredients or components of almost everything we consume or use in our everyday life. Some of the most common commodities are corn, wheat, gold, silver, copper, oil, gas, cattle, sugar, coffee and cotton.
Commodity Exchanges are Still a Necessity to the Economy
The purpose of commodity exchanges is to provide a centralized marketplace where commodity producers (commercials) can sell their commodities to those who wish to use them for manufacturing or consumption. The beauty of a commodity futures exchange is that someone like a corn farmer can lock in a price for his crops months before they are even...
How are Commodities Chosen to Trade on an Exchange?
It might not make sense to many people that only a chosen few commodities trade on futures exchanges, while many other commodities do not. The basic answer is that many commodities have no major economic reason to trade on an exchange and it simply is not practical for others to be listed. Below is an explanation of why some commodities are...
What are Derivatives?
A derivative is a financial instrument or security that is based on the price of another asset, which is called the underlying asset. Derivatives are often highly leveraged instruments and the most commonly types are futures and options.
Are Commodities Really Risky?
Commodities aren’t necessarily more volatile than stocks, but they can be considered more risky. The reason why is due to the leverage in futures contracts. If you only had to put down about 5 to 10 percent of the value of a stock, it would be just as risky as commodities.
Dow Jones - AIG Commodity Index
The Dow Jones - AIG Commodity Index is a diversified measure of the commodities futures markets.
Rogers International Commodities Index
The Rogers International Commodities Index measured the global price level of commodities.
Understanding the Continuous Commodity Index
What is the Continuous Commodity Index (CCI Index) and what commodities make up the index? The CCI Index date back to 1957 and was formerly known as the CRB Index.
Understanding a Futures Contract
The main features of futures contracts to learn are ticker symbols, futures contracts, contract sizes, delivery months and price quotes.
Futures Quote and Chart Websites
You will likely want to check quotes and examine charts if you are interested in trading commodities. There are several free sources online where you can check delayed or real-time quotes and charts.
Commodities and a Futures Contract – How Are They Different?
What are the differences between commodities and a futures contract?
Futures Margin – All About Margin on Futures Contracts
Futures Margin has many different meanings in futures trading and includes initial margin, maintenance levels, margin call and why margin changes.
Where to Find Futures Quotes and Charts
Several online sources provide futures quotes and charts. Three of the top sources for futures quotes are discussed.
Where do Commodities Trade?
Commodities trade on regulated futures exchanges including the Chicago Board of Trade, Chicago Mercantile Exchange, New York Mercantile Exchange and ICE Futures.
Futures Contract Specs
The main features of futures contracts to learn include ticker symbols, futures contracts, contract sizes, delivery months and price quotes.
Intro to Futures and Options Manual
An in-depth publication from the Chicago Mercantile Exchange that covers most of the basics of futures trading.
The Short Side Of Commodities - How To Sell Commodities
Selling a commodity is just as simple as buying a commodity. Here is a simple explanation of why and how commodity traders can make money selling commodities.