Skip to content
  • Home
  • Contact
  • Blog
  • Categories
    • Blog
    • Forex4money Reviews
    • learn forex trading strategies
    • Currency Trading
    • Business News
    • Forex Trading Platform for Beginners
    • Forex signal provider
    • Stock Market Trading

Forex4money Blog

HomeBlogThe basics of commodity trading and which platform is the most suitable for beginners

The basics of commodity trading and which platform is the most suitable for beginners

By Forex4money October 19, 2021 Blog, Commodity Trading 2 Comments

A commodity market is a place where buying and selling of raw material or we can say the trade of primary product can be possible. What kind of raw material & primary product such as oil, coffee beans, gold, etc. There are two kinds of commodities – Hard commodities and soft commodities. Here are hard commodities which are hard to extract such as gold, rubber, oil, etc. On the other side, soft commodities are agricultural products such as corn, wheat, coffee, sugar, soybean, etc.

Now, how does someone take entry into the commodity market for commodity trading ? Investors can get exposure to this market by investing their money into this via future’ contracts.

Commodity trading in India – Trading is not new in India, it’s been in our culture for so long. Earlier, people use to do trade by barter system which means people exchanged goods to fulfill their needs. 

Commodity trading for beginners – For beginners, it’s simple to understand if they have exposure to the stock market. All things are almost the same but the only difference is the Commodity is used in the Commodity market and equity is used in the share market.

It’s advisable for beginners to do trading with the practice of a demo account first. Why demo account? Because it will help the beginner in trading as it’s a way of increasing beginner’s confidence.

Types of commodity market – It’s divided into Spot Market and also referred to as a derivative market. Here spot Market is known as cash market which means in this market buyers or sellers do exchange commodities but for immediate delivery.

Where the derivative market, it involves futures, options, and forwards.

Derivatives markets involve forwards, futures, and options. Forwards and futures are derivatives contracts that use the spot market as the underlying asset. These are contracts that give the owner control of the underlying at some point in the future, for a price agreed upon today. Only when the contracts expire would physical delivery of the commodity or other asset take place, and often traders will roll over or close out their contracts in order to avoid making or taking delivery altogether. Forwards and futures are generically the same, except that forwards are customizable and trade over-the-counter (OTC), whereas futures are standardized and traded on exchanges.

Examples of Commodities Markets

The major exchanges in the U.S., which trade commodities, are domiciled in Chicago and New York with several exchanges in other locations within the country. The Chicago Board of Trade (CBOT) was established in Chicago in 1848. Commodities traded on the CBOT include corn, gold, silver, soybeans, wheat, oats, rice, and ethanol.9 The Chicago Mercantile Exchange (CME) trades commodities such as milk, butter, feeder cattle, cattle, pork bellies, lumber, and lean hogs.10

The New York Mercantile Exchange (NYMEX) trades commodities on its exchange such as oil, gold, silver, copper, aluminum, palladium, platinum, heating oil, propane, and electricity.11 Formerly known as the New York Board of Trade (NYBOT), ICE Futures U.S. commodities include coffee, cocoa, orange juice, sugar, and ethanol trading on its exchange

Commodity Market Trading vs. Stock Trading

For most individual investors, accessing commodities markets, whether spot or derivatives, is untenable. Direct access to these markets typically requires a special brokerage account and/or certain permissions. Because commodities are considered an alternative asset class, pooled funds that traded commodities futures, such as CTAs, typically only allow accredited investors. Still, ordinary investors can gain indirect access to commodities via the stock market itself. Stocks on mining or materials companies tend to be correlated with commodities prices, and there are various ETFs now that track various.
Conclusion – Commodity market deals with hard and soft commodities both but most probably it’s same as share Market.

Tags:forex trading for beginners, Forex Trading Free Demo Account, Forex Trading In India, Online Forex Trading, Online Forex Trading For Beginners

Related Posts

What is Ethereum in Foreign Exchange Trading, which ranks high in the market capitalization of virtual currencies?

The Complete Beginner’s Guide to Crypto Assets In Foreign Exchange Trading

How to Find the Best Forex Trading Platform?

How to Find the Best Forex Trading Platform?

Can you trade Forex with $100?

Can you trade Forex with $100?

About Author

Forex4money

2 Comments

  1. Forex4money November 11, 2021

    visit the website
    https://www.forex4money.com/RealTimeCharts.aspx

    Reply

Add a Comment

Cancel reply

Your email address will not be published. Required fields are marked *

Recent Posts

  • How to Find the Best Forex Trading Platform?
  • How to use the Forex Super trend Indicator?
  • What is Forex spread in online forex trading?
  • 5 ways to get Bitcoin for free | Explaining methods and precautions
  • Online trading Forex Essential to Avoid Scams

Categories

  • Blog
  • Business News
  • Commodity Trading
  • Currency Trading
  • exchange forex demo
  • Forex Calendar
  • forex investment
  • forex real time chart
  • Forex signal provider
  • Forex Trading Charts
  • Forex Trading Online
  • Forex Trading Platform for Beginners
  • Forex4money Reviews
  • Indian Forex Trading
  • indices trading online
  • learn forex trading strategies
  • online forex trading broker
  • open forex Account
  • Stock Market Trading
  • Trade
  • will Bitcoin crash

Archives

  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • February 2020
  • December 2019
  • October 2019
  • December 2018
  • October 2018
  • June 2018
  • May 2018
  • April 2018
  • December 2017
  • November 2017
Forex4money Blog Copyright © 2022.
© 2015 Forex4money. All rights reserved Back to Top ↑