Commodities Market

Contracts in Commodities Market

November 9th, 2017 Filed under Future Trading News | Comment (0)

What is an Online Commodities Futures Trading Contract?

Online trading of commodities futures creates a commodities contract, which is a legal agreement between two parties. The contract specifies that you agree to buy or sell a product or asset to be “delivered” later at a certain price. The buy/sell price is called the future price of the underlying asset. Commodities futures brokers can assist you in online commodities trading.

Commodity Markets and the Stock Market

Over my years as a commodity broker, my brain tended to think of the following correlation: when stocks are “hot”, commodity markets tend to under perform. When stocks tumble, commodity markets tend to do better.

As the years progressed and the markets evolve, as they always do, my brain started thinking along the lines of “when crude oil futures are hot, commodity markets start sizzling…”

Then a few years went by and the same brain, just a bit older started whispering….”when the dollar index is strong, commodity markets tend to get weaker…..”

The bottom line is that all of the statements above were true at one point or another and some may be true as you are reading this BUT the main conclusion should be:

Commodity markets compromise of many different markets and segments like grain futures, energy markets, softs, meats, metals and much more. These markets are all affected by some mutual elements like dollar strength but also by very specific elements like supply and demand, weather, geo political and much more.

Do your homework and just like the commodity futures markets, keep evolving, evaluating and educating yourself.



Types of Investors

There are two kinds of participants in online commodities trading markets: hedgers and speculators. Hedgers don’t necessarily seek to profit by trading commodities futures; they are striving to stabilize their income and expenses (the costs of their business operations). This allows them to make a budget and predict their costs to their investors and board of directors. Most speculators do not want to physically take possession of the underlying asset: they do not want truckloads of corn dumped in their driveway. Speculators are betting on the future prices of certain commodities. They have the power to cause dramatic price swings in the futures markets, but they also provide liquidity – the ability to sell an investment at its near-value – to the futures markets.

Types of Contracts

Read the rest of this entry »

Commodities Market Volatility Continues | Support and Resistance Levels

October 21st, 2011 Filed under Commodity Brokers, Commodity Trading | Comment (0)

In this post:

1. Market Commentary
2. Support and Resistance Levels
3. Daily Mini Mini S&P 500 Futures Chart

1. Market Commentary

Volatility remains high and what I wrote the last few days, still holds:

As far as the daily chart, I am now confused again….I got tempted on the short side and got burnt very quickly today….Once again there is a CASE for both sides, bulls and the bears and the potential for a BIG MOVE EITHER WAY is greater than normal as we are sitting on important price levels in the SP500, which has been the leader for the rest of the markets as of the last few weeks. Read the rest of this entry »

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