COMMODITIES

The commodities market works just like any other market. It is a physical or a virtual space, where one can buy, sell or trade various commodities at current or future date.

One can also do commodity trading using futures contracts. A futures contract is an agreement between the buyer and the seller, wherein the buyer promises to pay the agreed-upon sum at the moment of the transaction when the seller delivers the commodity at a pre-decided date in the future. 

 

Commodities can be an important way to diversify a portfolio beyond traditional securities – either for the long term or as a place to park cash during unusually volatile or bearish stock markets, as commodities traditionally move in opposition to stocks.

Characteristics of the Commodities Market

Basic economic principles of supply and demand typically drive the commodities markets: lower supply drives up demand, which equals higher prices, and vice versa. 

Types of Investment Commodities

Today, tradable commodities fall into the following four categories:

  • Metals (such as gold, silver, platinum, and copper)
  • Energy (such as crude oil, heating oil, natural gas, and gasoline)
  • Livestock and Meat (including lean hogs, pork bellies, live cattle, and feeder cattle)
  • Agricultural (including corn, soybeans, wheat, rice, cocoa, coffee, cotton, and sugar)

Volatile or bearish stock markets typically find scared investors scrambling to transfer money to precious metals such as gold, which has historically been viewed as a reliable, dependable metal with conveyable value. Precious metals can also be used as a hedge against high inflation or periods of currency devaluation.

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Sterling Holdings Ltd. provides online trading services via its brand “Revolve Markets” and its billing agent and revolvemarkets.com website and domain registrar. The Company provides its services through a trading platform/electronic system for online trading on the investment market. Trading in the investment markets online is speculative and carries a high level of risk, thus may not be suitable for all investors. If you are thinking of trading online in the investment markets, you should be aware of all the risks associated beforehand and take your investment objectives and level of experience into consideration. You should not speculate with capital that you can’t afford to lose, as there is a possibility you may lose some or all of your invested capital. Please note that revolvemarkets.com and its partners and associates, do not accept clients or client funds from the US and North Korea. Read our full risk discolure.

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