Learn commodity trading online - PPT

1. Learn Commodity trading online.

2. INTRODUCTION • Commodity trading is an investment technique in which commodities, instead of stocks, are exchanged. Commodities may be traded as futures contracts on a spot basis or on futures exchanges. A futures contract is an arrangement between two parties for a certain price to purchase or sell an asset at a certain point in the future.

3. Understanding concept of online commodity trading

4. Online Commodity Trading • Commodity trading online has gained popularity for many investors in recent years. Online commodity trading platform offers easy and convenient trading experience to investors. Trading commodities online also allows instant trading without having to contact a live broker to place your orders.  • Almost everything you could possibly need to trade commodities is available through an online commodity trading account including commodity trading charts, commodity news, and technical analysis programs.  • Online commodity trading gives you a sense of independence as a trader is in control of the trade and must make end trading decisions.

5. Advantages of online commodity trading • Convenient trading: Online commodity trading platform offers easy and convenient trading experience to investors. It provides high-end integrated trading applications for fast, efficient and reliable execution of trades. You virtually have everything you need when you log in to your trading account. Investors get access to a multitude of resources like live quotes, charts, futures news, research and even online assistances. • Flexibility: Online trading is nearly instantaneous, providing you the freedom to trade at your leisure from anywhere, anytime. This flexibility means you have the freedom of watching the market and making quick trades if needed. You don’t have to wait on anyone other than yourself.  • Lower commissions: You can expect much quicker execution of your trades through an online broker as well as lower commissions. It is a lot cheaper to buy/sell one futures contract than to buy/sell the underlying instrument..

6. 4. Liquidity: Another major benefit of online commodity trading is liquidity. Liquidity is characterized by a high level of trading activity. Assets that can be easily bought or sold are known as liquid assets. The involvement of speculators also means that futures contracts are reasonably liquid. 5. Leverage: Commodity trading also offers the benefit of leverage. Leverage means use of borrowed capital or margin to increase the potential return of investment.  Only a small percentage of the total value of a position is needed to be paid upfront to get full benefit and to enhance profits. 6. Diversification: Commodity returns have historically had low or negative correlations with the returns of other major asset classes, and may be used to diversify a portfolio. Commodities may react differently from stocks and bonds in various economic and geo-political situations, enhancing risk-adjusted returns and reducing the overall volatility of a portfolio.

7. Conclusion • Online commodity trading can be an effective way to diversify your financial portfolio. Just keep in mind that commodity trades carry a degree of risk. This is primarily because their prices are impacted by various national and international factors, including weather patterns and natural or man-made disasters. However, seasoned investors recognize the importance of detailed research and analysis.

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