Exposure to real assets can be achieved through commodity futures trading on one of the many global commodity exchanges across the world. A commodity futures exchange will set out the criteria on which it will accept a commodity for futures trading. Futures contracts must also show clearly the standard amount of the commodity being sold or bought. For example, the standard futures contract for ICE Futures US Robusta Coffee is 37,500 pounds.
And if you get into commodity futures trading you will need to be sure about which contract is being traded. For example, if you trade ICE Futures Europe Coal, is it the Rotterdam or Richards Bay contract. An interesting point to note in commodity futures trading is that the price at which you will sell or buy the commodities at a future point in time is fixed.
Commodity Futures Trading Account - The Sensible Approach to Opening Your Trading Account
You are considering the trading of commodities, or the options on futures as a wonderful way to supplement your income. You begin by going to the internet to find commodity and futures brokerages. Through your research you discover there are three basic levels of service futures brokers provide to commodity traders, which are full-service, discount, and online futures trading. Generally speaking the majority of beginning commodity traders will opt for online futures trading because it is normally the least expensive choice. Also, there is the sense of independence when online trading because one can place their own trades, bypassing a commodity desk clerk or futures broker.
We will now explain the sensible approach to take for a commodity trader when opening a futures trading account. Many commodities such as gold and silver have strong seasonal tendencies, not just the agricultural commodities. Please keep in mind that the leverage when trading commodities is tremendous. For example; the margin required in your trading account to hold a Corn futures contract is $2100.00. Also, check out the Futures Commission Merchant that your commodity broker clears his trades through.
Commodities Paper Trading - Giving You an Idea of the Profits You Can Make
The futures trading market is one in which commodities are traded. You can and you can do this with commodities paper trading.
Commodities paper trading is a practice that involves using "fake," or "imaginary," money. If you decide to try commodities paper trading, you will need to find a commodity trading broker who offers the program. Many commodity trading brokers allow you to try their commodities paper trading program free of charge for a specific period of time, which is often thirty days. Commodities paper trading enables you to make real-time commodity trades with "fake," or "imaginary," money. When doing commodities paper trading no real money is involved. It is also important to mention that many commodities paper trading programs are completed with the assistance of a commodities trading broker, who is at your disposal.