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Understanding commodity futures
By Capitalist | April 12, 2009
Commodity Futures is an agreement or a contract to buy or sell an established amount of goods on a future date. The goods are bought or sold at market prices belonging to that particular day and the goods are transferred from the seller to the buyer inclusive of the right to ownership.
Commodity Futures is traded with perception of a price rise or fall. It is done by an in-depth analysis of market volatility in the commodity market. Future commodity trading is generally done on physical commodities like precious metals and grains.
The seller deems that the price on a future date that he is settling for will be enough to give him a return, and the buyer believes that the price in near future would make him win rich dividends too. Overall, it is a symbiotic agreement. Commodity future trading is a little less volatile than other forms of commodity trading.
Topics: Commodity Trading, Financial planning, Income | No Comments »