Trading in futures commodities is
an agreement to buy or sell an amount of a commodity at a predetermined price
and date. In futures contract a buyer seek to avoid the risks involved in
market price variations of the commodity, whereas, the seller tries to
capitilise on the opportunity of market fluctuations by locking in on a suitable
price on their raw material.
But this highly profit earning
investment option has it’s pitfalls, as it may not be a good idea for an
inexperienced trader to go for futures contract, as the large amount of
leverage is too great and slight variations in the prices of the commodity may
result gaining high profits or high losses while comparing with the margin you
had started out with.
There are many commodity broking
firms who offer commodity trading in future contracts and many have good
trading platform for faster and secure transactions, and they generally have
quality research to empower a trading in making wise and timely decisions on
insightful information on the commodities market.
The more sophisticated the
trading platform, the better it is for the trader in buying and selling of
commodities online. Benefits like real time news and market updates, instant
confirmation on order placed, easy customization of portfolio, facility to make
a phone call and order execution of order etc.
There are a few very lucrative
commodities like Gold and Silver and traders love to invest in these futures
contracts as the market and it’s volatile nature itself presents excellent
opportunites to make huge profits in a short duration.
Trading in futures commodity is a
very simple affair as only a trading account needs to be opened with the help
of a broker and you can start trading in Gold and Silver with an initial
investment called margin.
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