Question on Commodities Trading?
Thursday, February 11th, 2010 at
3:07 am
Oli-NYC asked:
How does commodities tradings work? Stock trading, fox example, is done through a brokerage via online…So I was wondering if I wanted to buy and sell commodities, how would I do that?
How does commodities tradings work? Stock trading, fox example, is done through a brokerage via online…So I was wondering if I wanted to buy and sell commodities, how would I do that?
Tagged with: Commodities Trading • Trading Commodities • Trading Stock
Filed under: Commodity Trading
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Through brokers that specialize in commodities. Many also have online trading capability. Lind Waldock is one.
Make sure you understand the great risks in commodity trading before you do it. There is tremendous leverage which works both for and against you, also there can be times where it is difficult to get out of a losing position. You may want to start with options trading, where your risk is limited to your premium, before you trade commodities contracts, because you can lose far, far more than your initial margin in a contract.
I do it through a broker online.
Many stock brokers also have commodities divisions. Many of the most reputable firms in commodities are companies that you never heard of because they only do commodities and don’t get the same press coverage as stock brokers.