Getting Started in Commodities

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The Roles of People at the Commodity Exchange

A number of people are involved in making sure that your commodity order is executed as smoothly and efficiently as possible, and your order goes through an extensive supply chain before it’s executed. [more…]

How to Own a Piece of a Commodity Exchange

One of the biggest trends in the global investment game in the beginning of the 21st century is the increasing popularity of commodities in investor portfolios. Driven by high commodity prices, many investors [more…]

Introduction to Futures, Options, and Commodities

Some investors think that “futures and options” and “commodities” are basically the same, but they’re not. Commodities are a class of assets that includes energy, metals, agricultural products, and similar [more…]

How to Trade Commodities in Futures Contracts

The commodity futures market is divided into two segments: one that’s regulated and another one that’s unregulated. Trading in the regulated portion of the futures market is done through designated commodity [more…]

Hedgers Who Trade Commodities in Futures Contracts

One group who trades commodities in the futures market is commercial producers and consumers of commodities who use the futures markets to stabilize either their costs [more…]

Speculators Who Trade Commodities in Futures Contracts

One group that trades commodities in futures contracts consists of individual traders, investment banks, and other financial institutions who are interested in using the futures markets as a way of generating [more…]

The Pieces of Commodity Futures Contracts

Trading commodities through futures contracts takes a lot of discipline, patience, and coordination. One of the biggest deterrents to participating in the futures markets is the number of moving pieces [more…]

Information Involved in Commodity Futures Contracts

Because commodity futures contracts can be traded on only designated and regulated exchanges, these contracts are highly standardized. Standardization simply means that these contracts are based on a uniform [more…]

Time and Location Information in Commodity Futures Contracts

There are many moving pieces involved in trading commodity futures contracts. The regulatory bodies that are responsible for overseeing and monitoring trading activities on commodity futures exchanges [more…]

Margin in Commodity Futures Contracts

One of the unique characteristics of commodity futures contracts is the ability to trade with margin. If you’ve ever traded stocks, you know that margin [more…]

Contango and Backwardation in Commodity Futures Markets

You need to be familiar with a couple technical terms related to movements in the commodity futures markets if you want to successfully trade futures contracts. [more…]

The Metallgesellschaft Debacle with Commodity Futures

Trading commodity futures contracts certainly isn’t for the fainthearted. Even the pros can run into lots of trouble in the futures markets. Consider what happened in the 1990s to a company called Metallgesellschaft [more…]

The Difference between Futures and Options in Commodity Markets

There’s a big difference between futures and options. Often folks think of futures and options as being one and the same in the commodities markets — that’s understandable, because whenever you hear “futures [more…]

Commodity Options in Action

Understanding commodity options can be challenging because they’re, in fact, derivatives used to trade other derivatives (futures contracts). So here’s an example that applies the concept of options to [more…]

Commodity Options Trader Talk

Commodity options traders have their own language. Options contracts give you the option to buy futures contracts for commodities such as wheat and zinc. When talking about options, you need to know certain [more…]

Questions to Ask Before Investing in Mutual Funds

Before you invest in a mutual fund, you need to gather as much information as possible about the fund itself, as well as about the mechanics of investing in the fund. You can get answers to these questions [more…]

The Basics of Master Limited Partnerships

If you're interested in investing in companies that are involved in the production, transformation, and distribution of commodities, one of the best ways to do so is to invest in a [more…]

Taxes and Master Limited Partnerships

One of the reasons MLPs are great for commodities investing is that, unlike regular corporations, they're taxed only once. Many publicly traded companies are subject to double taxation: They're taxed at [more…]

Cash Flow and Master Limited Partnerships

The whole reason Master Limited Partnerships (MLPs) exist is to distribute all available cash back to the MLP unit holders, which has to be done on a quarterly basis. These factors determine how much cash [more…]

How to Trade Futures Contracts

The futures market is divided into two segments: one that's regulated and another one that's unregulated. Trading in the regulated portion of the futures market is done through designated commodity futures [more…]

Who Trades Futures?

Essentially, two types of folks trade futures contracts. The first are commercial producers and consumers of commodities who use the futures markets to stabilize either their costs [more…]

The Anatomy of a Commodity Index

As an investor interested in making money through index investing, you have five commodity indexes at your disposal. Although the composition and structure of every index is different, the aim is the same [more…]

Investing in Commodity Companies

One route you can take to get exposure to commodities is to buy stocks of commodity companies. These companies are generally involved in the production, transformation, or distribution of various commodities [more…]

How to Fund Your Account with Commodity Funds

If you think delving into commodity derivatives isn't for you, you can access the commodity markets through funds. If you've invested before, you may be familiar with these two investment vehicles. [more…]

Look Toward the Future with Commodity Futures

The futures markets are the most direct way to get exposure to commodities. Futures contracts allow you to purchase an underlying commodity for an agreed-upon price in the future. Here are some ways you [more…]


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