A question asked by dizzle014: What is the difference between trading the futures market and the spot market?
No 1 answer:
Answer by Albi Nice There are a few differences but the MAIN practical DIFFERENCE would be that in trading futures, the trader is leveraged, i.e. he/she has to deposit only a fraction of the full (notional) value of the commodity or currency or stock index he/she is trading.
So when I buy a 100 ounce contract of gold on a futures exchange, I don’t have to put down USD 92,000 as I would have to in the spot or cash market. The exchange might allow me to trade that contract with only a USD 2,000 deposit, also called the Margin.
A question asked by skahhh: What is this loophole that congress is working on taking out of commodities trading that I heard at Bloomberg?
Most detailed answer:
Answer by Mark L Current law limits the number of futures contracts that speculators (like hedge funds) can own on a futures exchange. However, the funds get around this by buying contracts on electronic exchanges and swapping them. Congress wants the law to include all exchanges.
This might stop some of the speculative trading, but the price of oil will still go up because there isn’t enough of it and the dummies in Congress don’t want to drill off of the costs.
How about adding your own answer to the comments below!
A question from jonny j: How does the “futures” market work?
Currently we hear a lot about the price of oil for future delivery. Why don’t we hear about today’s price? Isn’t it today’s price that will determine the price of gas in a week or two (or however long refining takes) ?
The top answer:
Answer by JohnGalt There is a spot price, but most trading occurs in the closest month futures. Refineries don’t buy for use today, they buy for use next month or next year. They have an investory of crude, they plan ahead, and they cannot scale production up and down daily. Also, trading for future months can be offset by futures in the closest month, but not against a spot contract. Spot can have more random variations in it that are not indicative of the real price of oil.
A question from Johny: Is there always a buyer and always a seller in futures market?
For instance – when i buy a futures contract, what’s the risk that i won’t be able to sell it at a later time?
thnx
Most comprehensive answer:
Whether you agree or disagree, why not leave your own thoughts below.
A question asked by Toni: looking for free information on learning commodities trading?
I am interested in investing in commmodities futures trading.
The best answer:
Answer by sinclairag If you search TFC Charts on Yahoo! you will find an excellent site about commodities.
Commodities are usually traded in the form of futures. They carry a great deal of risk and are not suitable for most investors. You could easily lose a lot of money.
Do you know better? Why not leave your own answer in the comments below!
A question asked by salaudheenkv: my job is findout people to invest in US based future commodity trading? how can i improve my marketing?
i am working for a financial brokergae company. So my job is collect maximum future commodity trading accounts for my company. For this purpose, i need to approach rich people in my area. So please give me some ideas… how to find out them and approach them…
anwar
Chosen answer:
Answer by Jayson make an advertisements,,,,,,, but a great advertisements…. the advertisement that make them feel that it is not just a security,,, but make them feel that it is their necessity….
I cant help you coz im at my study period in college and im still in the college level major in marketing…..
A great visual look at the subject of commodity trading.
The sixth in a multi-part series on commodity trading. This entry covers the movement of futures prices over time. These movements (contango and backwardation) affect the roll yield for index investments. Understanding these movements helps explain the increased interest in commodity markets. For a better view of the graphs, I recommend watching the video on full screen. Also, be sure to check out my website at www.econoutlook.net for all of the graphs and more information!
Question by duc n: How and Where to find people Who want to be a multi-millionaire by trading stocks and commodities ?
How and Where to find people
Who want be a multi-millionaire
and have the start up money
to trade stocks and commodities ?
Most comprehensive answer:
Answer by R B try yahoo finance. There are many little groups there that you can join and I am sure there is one or more of those groups with people sharing your goals.
Do you know better? Why not leave your own answer in the comments below!
Question posed by mey: I am interested in investing some money in commodities esp oil and various metals. ?
How can one in Malaysia go about doing so in KL? Is there any investment company in KL specialized in this? I tried searching in through internet but could not find such company in Malaysia.
Please advise.
Thank you
The No 1 answer:
Answer by Jaminio Why does it have to be in KL? i am no expert on Malayan exchange rules but you should be able to buy ETC’s through a standard share dealing account or be able to set up a bank account that will allow you to trade futures and forward contracts. Again, i’m unsure of the legalities but all of these types of instruments are available in Singapore.
