What is Commodity Trading Commodity trading in its basic essence is not very different from currency trading, but a commodity trader will buy and sell and made investments in commodities. The two most common commodities for traders in this day are oil and gold. Commodity trading however exists for almost every type of commodity including cotton, wheat, sugar, cattle, sliver, and more. For a commodity to be tradable it has to have the following criteria; It has to be tradable, meaning it has to have a futures contract assigned to in major exchanges, or it has to be processed by a company. It has to be Deliverable, that is it can physically be delivered. And It needs to have liquidity, meaning have an active market with buyers and sellers and constant transactions. Commodity trading dates much further back into history than currency trading. Commodities have been sold and bought between people, and countries for centuries. Rice futures in China for example are thought to date as back as 6,000 years ago. Commodities have a huge impact on the economic environment or the world, as well as the people. Shortages of critical commodities have been the start of wars between countries, and to this day commodities such as oil continue to be a the cause of political feuds. The commodities of a specific region are the reason why a country can be rich or poor, and whether a country becomes a highly wanted area and at risk of being invaded. The changes of Commodity prices do not only affect traders, but impact the world as a whole, as these commodities will not only used for online trading, but for everyday consumers to buy and use for food, fuel etc. Online traders can access around 50 different soft and hard commodities for purely financial transaction, which are now outnumbering physical trades of delivered goods. Online traders invest in commodities with futures contracts, which are secured by physical assets. FxNet Team FxNet Ltd is a global, fully licensed Over the Counter (OTC) online Forex and commodities broker, regulated by the Cyprus Securities and Exchange Commission (CySEC). FxNet is located in Limassol Cyprus. FxNets mission is to reach and retain traders around the globe through exceptional customer service, integrity and continuous innovation that will provide our clients with simple, exciting and secured trading platforms. fxnet/news/what-is-commodity-trading
Posted on: Tue, 21 Jan 2014 16:25:24 +0000
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