How to Make Your Money Work With Commodity Trading
Posted October 9th, 2008 by SpikeWith all the uncertainity in the stock market, savvy investors are looking at trading futures in the commodity markets. By trading futures, you might realize huge profits. However, the opposite is also true: you might lose big. This is why commodity trading, especially trading in futures is not for everyone. You may consider futures trading to be a type of government-regulated gambling.
Futures contracts have been traded in the United States for over 150 years. However, for many years, futures trading was mostly unregulated. Greedy investors preyed upon other investors and the futures markets were full of fraud. In the 1920′s, the Federal government began regulating the market. Then, in 1974, Congress created the Commodity Futures Trading Commission. The CFTC was charged with the duty of overseeing the commodities markets.
In the beginning the futures markets traded mostly in agricultural commodities. Futures like corn, soybeans, cattle and pork were the norm. But now you can trade all types of commodity futures. Oil futures have been spotlighted by the news, but there are futures in gold, foreign currencies, stock market indices, and government securities.
With the current state of financial institutions and the stock market, many investors are turning to the commodities market. As long as the investor is aware of the potential for loss, trading commodity futures can be a worthwhile addition to the portfolio.
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