commodity funds

Trading Crude Oil - Factors to Consider in Trading Crude Futures

Over the last few years, the major moves that the price of crude oil has made has become attractive as oil along with some other commodities have outpaced the stock markets. For decades, commodity trading in petroleum products was a club for only the big guns. At 42 gallons per barrel, and a minimum contract size of 1,000 barrels, the prospect of delivering oil was only for professionals. But several changes have occurred in the last few years to alter the scene. This makes it possible for the average investor to trade crude rather than trading oil etfs or oil stocks.

Oil prices remained stable for decades until the explosion of the mid-70s. Political and technological changes resulted in shortages, uncertainty and rising prices.

Commodities Definition - A Look at a Sample Commodities Trade

To continue our look at the definition of commodities, let’s examine a highly simplified commodities future contract trade.

Suppose a trader buys a contract to purchase oil trading on NYMEX (The New York Mercantile Exchange) at $70 per barrel for WTI with an expiration date of August 6th. (Oil comes, obviously, from a variety of major sources, including the North Sea near England, Alaska, Saudi Arabia, West Texas, etc. The locations often lend their names to the different sub-types of commodity and generally have different prices).

Commodities Definition - What is a Commodity and Why Trade Them?

What is a commodity and why trade them?

Why aren’t paintings commodities? Because each one is unique. Commodities are uniform and one individual or portion serves the same purpose as any other. An ounce of gold, a barrel of oil, a bushel of wheat. In every case, one is pretty much like another. It makes little difference to most of those buying it whether they receive this ounce of gold or that one.

Commodity Mutual Funds - Tips for Investing in Commodity Funds

Commodities are a popular tool to diversify your portfolio. Historically, however, you had to trade futures in order to add commodities to your investments. But, with commodity mutual funds this asset class has become available to many average investors. Here’s some things you need to know before investing in commodity funds.

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