Commodity Futures Trading


In commodity futures trading is a type of  investment, where you can make the  money by speculating on the price of  certain goods up or down in the  future. Raw materials are usually the main things people use every day. In most cases, these products are the foundation for a modern society.



When  it comes to certain products traded on the futures market, it must meet certain conditions to make it allowed the negotiation. A condition is that the goods must be standardized. In the negotiation of agricultural and industrial products, the goods must be negotiated in your raw materials and unprocessed. In this case, wheat can be traded on the futures market, but no flour.



Another condition that goods must meet a certain type that is perishable must have adequate life. The reason for this is that these products are sold with deferred delivery scheduled at a later date. Therefore, it can not require a long life so that goods can be delivered with its quality is still good and intact. Another condition that the product must meet certain, it  is that  it must have a price that changes often, which creates uncertainty and opportunity for profit.



L  story behind the commodity futures trading has changed the need for farmers to earn more from each harvest. Before futures commodities began, farmers have always been at the thank you for your provider when s  acts in the pricing and sale of their crops. Dealers usually set the price and the farmers can not to anything other than  accept the terms. D  a way farmers were exploited by traffickers and if some form of sale of their crops.



In seeking to have a more equitable system of doing business, farmers have begun offering the collection for future buyers. Farmers have begun to take its own terms, for future harvests to dealers. The transaction consists of products offered as a fixed price for delivery to a specified date. Contracts have been signed between  farmer and  interested buyer to specify a certain amount of goods to be delivered at some point in the future. In this system, which is TODAY  Today known as futures trading began.



It  was later in 1878 as a central facility to deal with commodity contracts was established in Chicago. In this installation, farmers and merchants of  first started in the local trade in grain, which was delivered immediately after an agreement on price. It finally evolved into futures, when farmers began to commit future harvests to dealers interested u200b u200bdispostos d  buy for s  ensure that their grain supply is maintained in the future.



Previously, futures trading is to  first few agricultural products such as cereals. But later, a large number of  others joined in. Now there are markets Commodity Futures Trading dealing in precious metals such as  gold,  silver and platinum. There is also a futures market for cattle and livestock, as well as energy products like oil and natural gas. He then include trade in coffee futures, orange juice  advertising industry, such as wood, cotton and even the rate instruments  with currencies and interest stocks.

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