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Commodity Trading Online Article
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Boosting Your Investment By Trading Commodities Online
from: Maxx Trading GuidesCommodities trading deals with agricultural products, such as wheat, malt, sugar and corn, as well as metals, such as gold and contracts based on the purchase and trade of these goods, as opposed to the stock market which deals with all types of financial instruments, such as stocks, government securities, interest rates and indexes.
With the advent of technology, both stock and commodities trading are now traded online. For purposes of discussion, we will focus on commodities trading online.
The industrial revolution ushered in new technology that include more effective tools, a number of which are capable of creating more food. This new efficiency demanded more agricultural storage, transport, and more competent circulation of produce.
At first the markets could handle the rising demand for food, but as volume grew, the commodity markets with uniform pricing and delivery became progressively more significant. A system was then developed to cope with the hoarding of goods that happen during harvest times and with the scarcity that occur before the harvest.
With the new system, buyers could arm themselves from price irregularity by closing a deal for a certain commodity that is fixed at a particular price before they have a need for it. The contract based on this system is now known as futures.
The place where all these agricultural products as well as contracts based on the agreements between buyer and seller are being traded are called commodities exchanges.
Prior to the electronic age, there are certain places designated as commodities exchanges, however, these are now conveniently available on the net. Online trading are also referred to as screen-based or electronic trading.
In online commodities trading, customers send, buy or sell orders from their computers to an electronic marketplace offered by the exchange. There is no need to have brokers act in behalf of the customers, as brokerage approvals to trade are generated electronically. The online trading screen now takes the place of the trading pit.
An advantage for online commodities trading is price transparency since the top five current bids and offers are posted on the trading screen, in full view of all electronic market participants.
As with any investment though, an uptick in a certain commodity where one places his money could generate for him huge earnings but a drop in prices would provide the same loss. For example, assuming prices for meats would go up in the succeeding three months, a meatshop owner decides to place an order for one cow from a cattle raiser who sells it for $5.
This is to be delivered to the meatshop owner three months from when the deal is closed. They both sign a contract.The following day, cow prices rose to $6. The cattle raiser in this case loses $1 while the meatshop owner gains $1.
There are various trading sites available for online commodities trading. A minimum fee entitles an investor to create an account that entitles him to researches and technical analysis on listed companies, apart from actually trading online. Most have help desks and other tools necessary to assist an investor in coming up with the best possible judgment.
Online trading is great way to boost your investment without having to get out of the house and dressing the part. However, you must realize that commodities and the stock market in general live on volatile market conditions and therefore easily influenced by even the slightest economic and political changes. Click carefully.
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Commodity Trading Online News
Vitol Trader Asked to Go as Firm Shifted Its Strategy - Bloomberg
Vitol Trader Asked to Go as Firm Shifted Its Strategy Bloomberg - Vitol spokesman Don Goldberg, speaking from Washington, said yesterday that the Commodity Futures Trading Commission, which regulates US markets, ... Vitol Cuts Ties With Hedge Fund Trader Vitol cites strategy in removal of oil trader |
Commodities Trading in Mixed Fashion - Briefing.com
Commodities Trading in Mixed Fashion Briefing.com, CA - The mixed trading prices have the CRB Commodity Index trading with a relatively modest 0.2% loss. Early movers: Trading up: ANDS +55.5%, SWIM +40.9%, ... |
Fund manager charged for $50 million Ponzi scheme - Reuters
 BBC News | Fund manager charged for $50 million Ponzi scheme Reuters - WASHINGTON (Reuters) - The US Securities and Exchange Commission and the US Commodity Futures Trading Commission said on Thursday it has charged a ... Video: Congress Sounds Off Against SEC in Madoff Affair CFTC, SEC Charge Pa. Resident With $50 Million Ponzi Scheme SEC: Forte says he has no money to repay anyone |
SEC needs to merge with CFTC: Nasdaq CEO - Reuters
 Reuters | SEC needs to merge with CFTC: Nasdaq CEO Reuters - The Commodity Futures Trading Commission was born in 1974 to regulate commodity futures and options markets. But now many securities, such as options on ... Nasdaq CEO sees market role in financial crisis Clear OTC Trades To Make Markets Safer - Nasdaq CEO Nasdaq's Greifeld links SEC culture to Madoff failure |
Corn, Soybeans Fall as Firmer Dollar, Oil Drop Reduce Demand - Bloomberg
 Hürriyet | Corn, Soybeans Fall as Firmer Dollar, Oil Drop Reduce Demand Bloomberg - ... an analyst with Commodity Warrants Australia in Sydney. Corn for March delivery declined as much as 1.8 percent to $4.09 a bushel in after-hours trading ... US grains, soy fall on profit taking CBOT to limit ag receipts held by non-grain firms DJ CBOT Soy Outlook: Seen Up On Techs, Weather, Export Demand |