It is always for good
reason whenever commodities have been traded since ancient times. Commodity
trading is in fact older than the stock market. Commodities have always held
their value and never affected by inflation. A continuous auction market where
users buy or sell individual commodities, currencies and financial instruments
at a specified price is termed as “futures market”.
Commodity Trading Advantages: Commodity traders have the ability to
leverage their money. Commodities have material value and would not go
bankrupt.
Futures
Contract: You buy shares while investing in stock market. A contract is the
smallest unit that can be traded in futures market. A contract specifies the
time, date and place for a future delivery of certain commodity or good.
Speculators: Their
mission is to make profit from changes in price and not to take or make a
delivery of a commodity.
Buying: Whenever the
commodity price go up, the investors buy or go long. In this case, their
contract specifies a lower price of commodity than the current price and thus
they make profits.
Selling: Investors
sell or go short when they expect the price of commodity to decline. Buying a
contract at the low price is realization of profit.
Trading commodities are very risky but can be highly profitable. Thus
traders need to be careful otherwise they can be easily wiped out. Visit www.abans.co.in to know more about commodity trading.
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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