Commodity trading - types of products There are several types of products. The products are categorized so it is easier to compare prices, do research, and to make things other commercial practices. If you are an investor who wants to get involved in commodities trading, you should know the basics. This is indeed one of the most risky to invest, but it can also be among the most profitable if you know what you do.
Energy
This area was one of the most active in commercial products recently. This category includes products that are used to provide energy to heat and power businesses and homes. The most common of these is oil and its derivatives, among them crude and heating oil, propane, natural gas, coal and others, including sub-types or derivatives.
Each product has its own sense of "tick" or price changes, which are set by the exchanges. Each product also has a size of a standard contract. The size of the standard contract is the amount covered by a standard contract term. For crude oil, for example, the amount is 1,000 barrels. For wheat, it is 5000 barrels.
Grains
Wheat, oats, corn, rice and soybeans (soybeans that are not technically a grain) are agricultural products traded on different exchanges, including the highly respected Chicago Board of Trade, or CBOT for short. The trade of the product as well as futures and options on these and other derivatives, such as oil seed.
Each product has its own check or change in price, the contract type and size of the unit. Some prices are in dollars per ton, such as soybean meal. In this case, the contract size standard is 100 tons. It should be noted that most traders never see the real goods they trade, you can see by the amount indicated here that there is a reason.
Softs
Orange juice, cotton, sugar, cocoa and coffee are all so-called "soft" commodities. Many of them are traded on the Coffee, Sugar and Cocoa Exchange or CSCE. It should be noted that 80% of the oranges grown in the U.S. are turned into frozen concentrated orange juice, and he himself is the juice sold as merchandise, not orange.
There is a newcomer to the New York Cotton Exchange, frozen concentrated orange juice, or FCOJ. This has been actively traded since the creation and widespread use and integration of refrigeration inexpensive, which begins after the Second World War.
Meat
Pork bellies, lean hogs and live cattle are traded on various scholarships, as are some derivatives. One of these exchanges is the Kansas City Board of Trade, or KCBT, which is the U.S. trading center of historic cattle.
A commodity that is unique here is the pork, bacon, because that comes from pork bellies can not be substituted with a similar product. Their prices are also generally related to grain prices, because pigs are fed a diet of corn and other cereals. These prices are generally less volatile than in many other products.
Financials
Most traders to invest in commodity futures or options rather than the property itself. For this reason, financial products are often listed the same.
U.S. Treasury futures are traded on the CBOT, as well as other places. A few indexes tracking inventory. The S & P futures contract is a popular award.
It should be noted that some sites abbreviations indicating the month of expiry of futures contract prices indicated. For example, they are displayed are as follows, listed by quarter:
January - F, G, February, March - H
April - J May - K, June - M
July - N August - Q September - U
October - V, November - X
Posted on January 22, 2010.
