We help individual investors capitalize from the commodities market as global demographic shifts drive prices up. Commodity trading involves buying and selling commodities, such as natural resources or agricultural products, on exchanges. This can include energy sources like crude oil and natural gas, metals such as gold and silver, and agricultural products like wheat and cotton. The primary goal in commodity trading is to profit from fluctuations in the price of these commodities.
Unlike stocks, commodities can’t be held forever. Every futures or options contract has an expiry (settlement) date. As a thumb rule, never let your commodity trades enter into a settlement phase. It’s better to square off your positions at least 2-3 days before the settlement date.
The capital needed to trade commodities depends on the type of commodity and the broker’s policies. Brokers often have specific margin requirements for commodities.
Commodity trading offers several benefits that can attract both individual and institutional traders:
- High Liquidity: Many commodities, especially gold and crude oil, have high trading volumes. These markets tend to follow price action well.
- People who are unable to trade during the daytime (office-goers) can use the opportunity to make potential extra income!
- Less Price Manipulation: Commodities are traded globally, reducing the chances of price manipulation compared to more localised markets.
- Hedging Opportunities: Businesses can hedge against price fluctuations to stabilise costs and revenues.
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