Article Side

Online Article Directory!

Hello Guest! Login or Register to submit articles!

Investing in Commodity Markets

By Kiran Rawat Subscribe to RSS | December 12th 2011 | Views:

Commodity market are the markets which transacts business with commodities of all nature. Commodity market was meant for only agricultural products and that too for local market. Due to globalization, advance technology and increasing demand from consumers and competition from other players has made commodity market to go beyond the boundaries with regards to the commodity traded. Commodity markets mainly deals in the trading of gold, cotton, crude oil etc. Commodity market does not necessarily require to buy or sell the commodities but you can even make exchange of commdities too. Many items finished good, raw material are traded in this market. Commodity market works on certain principles. Firstly the trading has to be done only for standard products. Secondly the transaction takes place through a future contract. According to this contract the commodities will be sold or bought on a future date. However the price at which they are sold will be the price agreed during the contract.Similarly commodity marketing also makes use of another type of contract called spot contract. In this contract the goods are to be transferred as soon as the contract is made. However it has also been argued that the purpose of a spot contract is to exercise a future contact in due course of time. Some of the commodities investing market are commodity food market, commodity petroleum market and commodity fund investing. Commodity investing was initially received well only by a few sectors. Commodities investing were first restricted to the trade and exchange of commodities meant for regular and day to day use. However the awareness in the subsequent stages has brought all sectors into the manifold of commodity investing and has enabled speedy movements, transfer and transaction of goods and services. As an investor your chances of risks are very less if you choose to invest in commodity. Therefore the gains from commodity investing will be helpful for you to balance other losses due to other financial instruments in your portfolio. The chances of risks are lower because commodity investing primarily deals with diverse items. Moreover when the contracts are entered for a future date at the current time you can exercise reasonable care and see to it that the chances of risks are reduced or nil. The performance of commodity market can be monitored by analyzing the performance of bond and share market because in most cases a commodity market will perform well when the others don't perform and vice versa. It is therefore possible to easily predict the prices and make the contracts by considering the ups and downs in other markets. A prerequisite for this is that the assets in the commodity market should not be correlated with the stock and bond market.

Kiran Rawat - About Author:
Name : Kiran Rawat
E-mail :
Blog    :

Share on Facebook Tweet It Stumbleupon this post This post is delicious !

Article Source:

Related Finance Articles Subscribe to RSS

Advice and tips for settlement of debts
Published by Rajkumar Kaushal on June 19th 2012 | Finance
Sometimes, it is when most people are in debt that they start looking for advice. Advice can be expe...
Asked more Manoj Narang, Take control of about high-frequency tips? to understand
Published by Crofton Holmes on January 5th 2012 | Finance
Quite a few keep attempt to democratize ones character with exceptional research in the real estate ...
Top tips for money management and using a credit card
Published by Jesse Wallace on June 6th 2012 | Finance

Learning how to use your credit card effectively could help you balance and manage your debts....
Top tips for better auto quotes
Published by Auto Insurances on January 14th 2012 | Finance
Type of vehicles that you choose to purchase will influence the premium costs big time. Apart from t...
Most excellent home mortgage calculator plus home buying tips
Published by Andrew Watson on December 30th 2011 | Finance
For a number of people it certainly is very much common to look around for best mortgage calculator....
Reliable tips for traders to make riches in the stock market
Published by Cody on June 7th 2012 | Finance
This is one of the most important things that you need to keep in mind before you start trading on s...
Commodity Bhavishya provide commodity advice on Gold and Silver tips
Published by Alena on December 24th 2011 | Finance
Commodity Bhavishya provide commodity advice and tips on MCX, NCDEX , Nifty FUT services, legs inven...
Best legal tips on Debt Settlement San Diego
Published by Chris Adam on February 9th 2012 | Finance
Once you have faced financial crisis you must follow the advice of proper Debt Settlement San Diego ...