Learn Commodity Trading

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Learn Commodity Trading By: www.CandleStickForums.com

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http://www.CandleStickForums.com Learn Commodity Trading To learn commodity trading, consider Commodity and Futures Training. In Commodity and Futures Training you will learn the types of commodities that can be traded, how futures contracts are set up, and how prices for futures are arrived at. To learn commodity trading you will want to understand why traders trade and how they do it. The point of trading commodities futures or futures options is to make money but that means effective handling of investment risk as well as scouting out commodity trading opportunities. Learning fundamental analysis and technical analysis of the commodities market are both essential for successful trading. Both agricultural and industrial commodities are traded in their unprocessed state. Wheat is traded but not bread or flour. Gold bullion is traded but not rings and bracelets. A traded commodity is something that varies in price over time. Otherwise there is no point in trading it. Although trading of commodities takes place at the Chicago Board of Trade and the New York Mercantile Exchange traders can access these markets trading online. Commodity trading is in commodity futures. There are two basic types of traders. Many commodity producers trade in order to hedge their risk. Agricultural cooperatives, mining operations, and large food processing corporations commonly buy and sell commodity futures. For example, a gold mining company may contract to sell half of its expected production of gold bullion at $1,000 an ounce next year even though the current spot price is closer to $1,100 an ounce. This guarantees that, should the gold market collapse, the company will still have a profit on part of its production. Traders who are not hedging on commodities are speculating on commodity prices. The addition of those who simply trade the commodities markets but are not buyers or producers of commodities adds liquidity to the markets by increasing trading volume.

Transcript of Learn Commodity Trading

Page 1: Learn Commodity Trading

Learn Commodity Trading

By: www.CandleStickForums.com

Page 2: Learn Commodity Trading

To learn commodity trading, consider Commodity and

Futures Training. In Commodity and Futures

Training you will learn the types of commodities that can

be traded, how futures contracts are set up, and how prices for futures are arrived

at.By: www.CandleStickForums.com

Page 3: Learn Commodity Trading

To learn commodity trading you will want to understand why traders trade and how

they do it.

By: www.CandleStickForums.com

Page 4: Learn Commodity Trading

The point of trading commodities futures or

futures options is to make money but that means effective handling of

investment risk as well as scouting out commodity trading opportunities.

By: www.CandleStickForums.com

Page 5: Learn Commodity Trading

Learning fundamental analysis and technical

analysis of the commodities market are both essential for

successful trading.

By: www.CandleStickForums.com

Page 6: Learn Commodity Trading

Both agricultural and industrial commodities are traded in their unprocessed

state. Wheat is traded but not bread or flour. Gold bullion is

traded but not rings and bracelets.

By: www.CandleStickForums.com

Page 7: Learn Commodity Trading

A traded commodity is something that varies in price over time. Otherwise there is

no point in trading it.

By: www.CandleStickForums.com

Page 8: Learn Commodity Trading

Although trading of commodities takes place at the Chicago Board of Trade

and the New York Mercantile Exchange traders can access these markets trading online.

By: www.CandleStickForums.com

Page 9: Learn Commodity Trading

Commodity trading is in commodity futures. There are

two basic types of traders. Many commodity producers trade in order to hedge their

risk.

By: www.CandleStickForums.com

Page 10: Learn Commodity Trading

Agricultural cooperatives, mining operations, and large food processing corporations

commonly buy and sell commodity futures.

By: www.CandleStickForums.com

Page 11: Learn Commodity Trading

For example, a gold mining company may contract to sell

half of its expected production of gold bullion at $1,000 an ounce next year

even though the current spot price is closer to $1,100 an

ounce.

By: www.CandleStickForums.com

Page 12: Learn Commodity Trading

This guarantees that, should the gold market collapse, the

company will still have a profit on part of its

production. Traders who are not hedging on commodities

are speculating on commodity prices.

By: www.CandleStickForums.com

Page 13: Learn Commodity Trading

The addition of those who simply trade the commodities markets but are not buyers or

producers of commodities adds liquidity to the markets by increasing trading volume.

By: www.CandleStickForums.com

Page 14: Learn Commodity Trading

There are two ways to go when you begin to learn

commodity trading. The first is to buy and sell futures and

the second is to learn commodity trading as options trading in commodity futures.

By: www.CandleStickForums.com

Page 15: Learn Commodity Trading

Futures trading is promising to buy or to sell wheat, live

cattle, or gold bullion on the contract expiration date. The

alternative to buying and selling futures is buying calls, selling calls, buying puts, or

selling puts on futures contracts.

By: www.CandleStickForums.com

Page 16: Learn Commodity Trading

As in all options trading buyers of options contracts purchase the right to buy or sell but not the obligation.

You may want to learn commodity trading but you

probably do not want to take delivery of a few tons of

refined metal or a herd of cattle.

By: www.CandleStickForums.com

Page 17: Learn Commodity Trading

Don’t worry. First of all no one will come to your house and dump refined copper on

your lawn. However, if you do not exit your contract before expiration you will receive

notice of where to deliver or where to pick up your

commodity.By: www.CandleStickForums.com

Page 18: Learn Commodity Trading

You will also need to pay or deliver the commodity.

Fortunately, options exchange will notify all holders of

contracts on the day before expiration that there is one

day left. The vast majority of traders exit their contracts at

that time.By: www.CandleStickForums.com