We Know: What are Commodities and Futures?
What is a commodity futures contract?
A futures contract is a legally binding agreement between two parties to buy or sell in the future, on a particular exchange, a specific amount of a commodity at a specific price. The buyer and seller of a futures contract agree now on a price for a product to be delivered, or paid, on a settlement date.
What is an option on a commodities future?
An option on a commodity futures contract is a legally binding agreement that gives the buyer, the right, within a specific period, to exercise his option to buy.
How do I go about trading futures or option contracts?
In the United States, futures contracts and options on futures contracts must be executed on or subject to the rules of a commodity exchange. Individuals cannot trade directly on an exchange. A person or firm must be registered with the Commodity Futures Trading Commission to trade on your behalf.
What are the different ways to trade commodities and futures?
There are two categories of accounts through which you may trade.
Should I consider trading commodities and futures?
Trading commodity futures and options is not for everyone. It is a volatile, complex, and risky business. Before you invest any money in futures or option contracts, you should: