Online Commodities Trading:
|
 |  |
Hedgers give up the chance to benefit from favorable changes in price so that they will have protection from unfavorable price changes. An example would be a company who wants to be protected from a price increase in the commodity that they will need to buy to make their product.
Speculators buy or sell in anticipation of rising or falling prices to make a profit.
Going Long –This occurs when a futures trader attempts to profit from an anticipated future price increase.
Going Short – Similar to going long but where the trader wants a future price decrease.
Spreads - is a safer and more conservative position where a futures market trader is taking advantage of a price difference between two different contracts of the same commodity. There are three classifications under the spread strategy:
| Inter-Market Spread – An investor with contracts expiring the same month goes long in one futures market and short in another. | |
| Calendar Spread – The simultaneous purchase and sale of two futures market contracts of the same type, with the same price but with different delivery (expiration) dates. | |
| Inter-Exchange Spread – Taking a position in more than one futures market. |
 |  |
How do you manage your
online commodities trading account?
Managing your own account in the online commodities trading market is the riskiest way to participate in the futures market, which is extremely liquid and complex. You may want to consider two alternatives to going out on your own – join a commodity pool, or have a managed account. Commodity Pools require management by a very skilled broker, but membership in one contains the least risk. Funds are pooled and invested; profits and losses are proportionate to the amount of money you have invested and you are not subject to margin calls. There is also greater opportunity for investment diversity.
A managed online commodities trading account involves hiring a broker who trades on your behalf based on agreed conditions. You are still responsible for any losses, margin calls, and a management fee, but this type of an account could lessen your financial risk.
A word of caution: It is Illegal for any person or firm to buy or sell futures contracts, or to offer them unless those contracts are traded on one of the regulated futures exchanges and the person and/or firm is registered with the CFTC and is a member of the NFA. Unregulated, illegal and off-exchange futures can carry deceptive labels. Approach any contracts with labels such as “deferred delivery,” “forward” or “partial payment” cautiously. Always verify that the offered contract is registered with the CFTC and the seller is a member of NFA.
Blink
Del.icio.us
Digg
Furl
Google
Simpy
Spurl
Technorati
Y! MyWeb |  |
 | Want to see our favorite commodity trading system? If you do not yet have a profitable system, this is the one you need. |
 | Would you like to know all the ins and outs of the futures market from an expert? How about the ability to anticipate the market? Peruse everything you get in this bestseller How To Trade The Futures Market at this link. |
Commodity Trading Charts...graph your way to an increasing profit trend! - Use Commodity Trading Charts to graph your way to top profits! We'll show you the best methods charting techniques and strategies!
Choosing a Discount Futures Broker
Finding the best discount futures broker to fit your needs!
| Feel free to link this page. Please use the following code: |
| Some of our more popular pages can be reached at the links below Best Stock System | Best Option System | Best Forex System | About Us Best Futures System | Marketclub | Penny Stock Advisor | Suggestions |
©2004 Best-stock-trading-systems.com All Rights Reserved.