Educational Resources for Traders

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United Futures Trading Company, Inc. Just what is commodity trading? Well lets look at first what a commodity futures contract is: A transaction in the commodity futures market is made on the trading floor or in the trading computers of the exchange between brokers who are members of the exchange that particular commodity is trading on.

The seller will have a broker, and buyer will have a broker. They will then transact an order for a purchase and sale. The buyers and sellers of commodity futures contracts have obligations. The buyer is obligated to take delivery and pay for the cash commodity during a specific time frame. The seller is obligated to deliver the commodity, for which he will be paid the price that was decided in the exchange pit by the brokers.

Sometimes the price commodity options and futures trading tutorials be more or less depending on the grade quality of the specific material. The buyer and seller can eliminate their obligation by offsetting their trade at the exchange before the contract comes due. This is what most speculators do in the commodity markets. There are speculators and hedgers that trade in the commodity markets. A hedger is not interested in making a profit off the movements in price of a commodity futures contract, but rather in shifting his risk of loss on the commodity itself due to adverse price change.

Speculators will commodity options and futures trading tutorials and sell futures, or options on futures, for the purpose of making a profit. They will buy futures a long position when they commodity options and futures trading tutorials prices will rise, or they will sell futures a short position when they think prices will fall. Both the speculators and hedgers add volume to a commodity options and futures trading tutorials making it a more liquid market to trade.

Most individuals who open commodity trading accounts are speculators looking commodity options and futures trading tutorials benefit off of the price movement of the commodity being traded. Farmers, oil operators, cattle companies, etc could open a commodity futures trading account looking to be a hedger and reduce their risk of price movement.

Here is a simple example of a speculator we will call him a futures trader executing a trade and how it would work. Once the futures trader has established a futures trading accounthe would then call his broker to initiate a trade. He would let the broker know if he was looking to buy or sell long or commodity options and futures trading tutorialsthe specific commodity he wants the trade in, the month and year of the contract he is looking to trade, the quantity, and the price which he is willing to buy or sell for or he can say Market Commodity options and futures trading tutorials to have the trade executed at the current market price in the trading pit.

Sometimes conditions are present when the trade can not be executed for some reason which is rare but can happen. After the trade is executed, the floor broker would relay price paid or sold and relevant information back to the trader's broker. The futures trader's broker would then let the futures trader know the price that the Buy or Sell the trade was executed. In recent times, more trading has been done through the use of online futures tradingeliminating the use of telephones and calling of brokers on the telephones.

The futures trader can trade directly from their computer and have the trade routed directly to the trading floor of the exchange. At the exchange some orders electronic markets are executed immediately in the exchanges computers. This is becoming the more preferred method of trading because it tends to be quicker. He then calls his broker or enters an order into his computer trading platform to sell the futures contract he has bought earlier in the day. Commissions and fees would be deducted from his buy and sell.

And remember the risk of loss exists in futures trading. This is just a brief example of how commodity trading works.

This in no way explains all the intricacies involved with trading. Trading commodities is risky and one should only use risk capital to invest. Please contact one of our licensed brokers who commodity options and futures trading tutorials explain more in-depth on how the commodity markets work, and determine if you are suitable to trade these fast paced markets. Also feel free to request a free investor kit from our site.

Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results and the risk of loss does exist in futures trading.

All trading rates quoted per side. Applicable exchange, regulatory, and brokerage fees apply to rates shown. Please email webmaster unitedfutures. Open An Account Now Online! The Basics of Commodity Futures Trading.

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Ca to check the registration of any person or company offering investment products, including binary options, to Canadians. Anyone who has invested with, or has concerns about, a binary options trading platform should contact their local securities regulator. We also encourage all investors to visit binaryoptionsfraud. Click on the ad and you are taken to an online trading site that explains how you can earn an income by trading in foreign exchange (forex) or derivatives such as binary options.

Many trading sites are based in exotic island locations (a popular one has its head office in Vanuatu, a group of small islands in the southern Pacific), so you have little recourse if you dont get back money you are owed.