Thursday 13 July 2017

Commodity Trading - Overview

Commodities are related to food, energy or metals and are important part of everyday life. High crude oil prices impact anyone who drives a car while drought on the soybean supply impacts people who eat. Commodities traditionally move in opposition to stocks. Investing in commodities require time, money, expertise and thus average investor do not take part in commodity trading. Some of the routes to commodity market are so easy that even a non-professional trader can participate.

Dealing in commodities is far older than dealing in stocks and bonds. Commodity trading is an essential business and agreed-upon standards are required in exchanges with respect to commodity trading so that trades can be executed. Commodity markets work on basic economic principles of supply and demand. Significant manufacturing players like India and China has contributed to declining availability of industrial metals such as steel for the rest of the world.

Tradeable commodities fall in four categories:

a)      Metals – Gold, Silver, Platinum and Copper
b)      Energy – Crude Oil, Heating Oil, Gasoline and Natural Gas
c)       Livestock and Meat – Live Cattle, Feeder Cattle, Pork Bellies
d)      Agricultural –Corn, Soybeans, Wheat, Rice, Coffee, Cotton and Sugar

Futures Contract is a popular way to invest in commodities and it is an agreement to buy or sell in the future, a specific quantity of commodity at a specific price. Two types of investors participate in the futures market: speculators and institutional or commercial users of commodities. You will have to open up a new brokerage account for investing in a commodity futures contract.


Founded in 2005, ABans Group has grown from being a trading house to a dynamic and diversified business group. We provide expertise in Broking Services, Merchant Banking, Non-Banking Financial Dealings, Jewellery manufacturing and Realty and Infrastructure. It is a comprehensive Financial Services and Solution Provider,which aims to provide an end-to-end financial solution to its clients.

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