commodity futures
TRANSCRIPT
In the world of online trading, one trades, stocks, currencies, and
commodities.
http://profitabletradingtips.com/trading-investing/commodity-futures
Commodities are certainly bought and sold directly but commodity
futures are a different matter and fall into the world of the online
trader.
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The point of commodity futures is to stabilize prices and give
producers and buyers of commodities an opportunity to
hedge their investment risk.
http://profitabletradingtips.com/trading-investing/commodity-futures
Commodity futures can be traded directly or by way of options
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What commodities can be traded as futures?
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Precious metals such as gold bullion, agricultural products such as wheat, or energy products such
as crude oil are all available as commodities futures.
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Where does one trade commodity futures?
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Knowing how to trade commodities starts
with the basics.
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The following is a list of United States Futures exchanges:
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CBOE Futures Exchange (CFE)Chicago Mercantile Exchange
(CME)Chicago Board of Trade (CBOT)
Chicago Climate Exchange (CCE)ELX Futures (Electronic Liquidity
Exchange)ICE Futures U.S.
http://profitabletradingtips.com/trading-investing/commodity-futures
Kansas City Board of Trade (KCBT)
Minneapolis Grain Exchange (MGEX)
Nadex (formerly HedgeStreet)NASDAQ OMX Futures Exchange
(NFX)
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New York Mercantile Exchange (NYMEX) and (COMEX)
NYSE Liffe USOneChicago, LLC (Single-stock futures (SSF's) and Futures on
ETFs)
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The CME group owns CME, CBOT, NYMEX, and COMEX.
http://profitabletradingtips.com/trading-investing/commodity-futures
http://profitabletradingtips.com/trading-investing/commodities-trading
http://profitabletradingtips.com/trading-investing/commodity-futures
Commodity is the generic term for any marketable item that people produce, dig up, or refine for in order to sell to satisfy demand.
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Trading of commodity futures is possible because tradable
commodities are standardized.
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For example, one can buy or sell a futures contract for a specific
grade of crude oil.
http://profitabletradingtips.com/trading-investing/commodity-futures
Refined gold bullion is standardized as are pork bellies, varieties of corn, soybeans, and
much, much, more.
http://profitabletradingtips.com/trading-investing/commodity-futures
Thus a soybean contract can be satisfied by crops from Brazil or
Iowa
http://profitabletradingtips.com/trading-investing/commodity-futures
A corn contract can be satisfied by shipments from Nebraska or the
Ukraine.
http://profitabletradingtips.com/trading-investing/commodity-futures
For the commodity futures trader it may make little difference who is
going to eventually sell or pay for a specific contracted lot of a
commodity.
http://profitabletradingtips.com/trading-investing/commodity-futures
The trader will most commonly exit his contract by making an
opposite trade one he has made a profit or minimized a loss.
http://profitabletradingtips.com/trading-investing/commodity-futures
What Determines Commodity Futures Prices?
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The price of a bushel of corn, ounce of gold, or barrel of oil is
determined by market forces, supply and demand.
http://profitabletradingtips.com/trading-investing/commodity-futures
Commodity prices have to do with what is on hand, what is in transit,
and what is likely to be available in the foreseeable future.
http://profitabletradingtips.com/trading-investing/commodity-futures
For example, known oil reserves have the effect of reducing today’s
oil prices
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Excellent weather raises crop forecasts and depresses the price
of corn, soybeans, or wheat.
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The threat of war and disruption of crude oil transport raises the price
of oil.
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On the other hand a worldwide recession reduces the demand for
oil and thus lowers prices.
http://profitabletradingtips.com/trading-investing/commodity-futures
When one adds futures to the equation one needs to consider
what the state of supply and demand will be in a month, year,
five years, or ten years,
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depending on how far out futures contracts are available for a given
commodity.
http://profitabletradingtips.com/trading-investing/commodity-futures
In trading commodity futures traders keep all this in mind and
then engage in technical analysis of market pricing in order to profit
from short term market movement.
http://profitabletradingtips.com/trading-investing/commodity-futures