Commodity trading has been expanded to a new level. Many traders prefer trading commodities, because commodities give huge opportunities to earn good benefit on your invested capital amount. You have often heard that investments or trading activity in commodity markets are laden with risk. Hence, traders has started taking commodity tips for good results. And the fact is that commodities tend to be more volatile market assets than equities, debt, and currencies.
The volatilities of many commodities are far higher than other assets. However, the highly leveraged instruments that add another level to the risky nature of the business are those traditional vehicles that allow market participants to access the commodity markets, futures and futures options. Only a small amount of capital is necessary to control a much larger amount of the commodity creating a higher degree of risk when it comes to futures and options on futures contracts.
Commodity Sectors We Consume Every Day
Gasoline is being used by us to put in our cars, heat and cool our homes, and use electricity to power our lives on a daily basis. Some of the main ingredients in fueling out lives are Crude oil, petroleum products like gasoline and heating oil, and natural gas. These energy commodities trade on a highly liquid basis on futures exchanges and all have ETF and ETN products that replicate price movements in the futures and physical markets.
2. Precious Metals
The metals that play a part in our daily lives are Gold, silver, platinum and palladium. We are consumers of precious metals, if we wearing or buying jewelery. When we drive a car, it is likely that our automobile has a catalytic converter that contains precious metals that have a high melting point.
3. Other Metals
The homes in which we live and the cars which we drive contain steel, which often includes alloys such as zinc, nickel, and tin. The water pipes through which water flows that likely contain copper. We use batteries that contain lead or other metals that create power.
We all need nutrition for our body. We eat bread and the main main ingredient in bread is wheat.Corn not only is an important food source for us and the animal proteins we eat but it is also a critical biofuel in the U.S. Each time we fill our car with gas, a percentage of the fuel is corn-based ethanol.
5. Soft Commodities
We all start our day with a cup of coffee and and some stir in some sugar, both of which are soft or tropical products. We wear clothes made of cotton. These three commodities trade on futures exchanges in the United States.
Commodities are traded worldwide and it has become a vital part of traders life. They earn their living by trading commodities. Hence, they need to be very careful while trading commodities. Professional traders prefer taking services from best and well known stock market advisory, in order to minimize the chances of risk and to earn great return.