Commodities allow you to trade on the future yield of real, tangible goods. Trading commodities futures can also be traded as ETFs, or exchange traded funds that buy a group of like commodity sectors in order to lighten risk and steady fluctuations.
Commodities are a simple way to start your portfolio with us. Talk with one of our account professionals today to see why this option could be the best for you.
In the trading of commodities, there are two main types of traders; Commodity Futures Traders and Speculators. Futures traders purchase the commodity at an agreed price and collect the actual commodity at the expiration of the contract.
As an example, a soybean farmer could sell his commodity, the future yield of soybeans, to hedge against the potential loss of product, and also receive a fixed payment. The speculator trades for the financial reward, rather than for the gain of the actual commodity. Above all, the daily traders choose this asset most often to offset risk and diversify their portfolios.