Commodities with high liquidity are often traded at great volumes by hedgers, investors, and traders so as to earn maximum profits from the preferable markets. Amongst the many Natural Gas, Crude Oil, Copper, Corn and Wheat have remained to be one of the highest traded commodity that are globally traded at bulk. These commodities are highly prioritized because of their low trading cost and price transparency.
Know More About Metals, Energy and Food As Commodities
The three forms of commodities which are metals, energy and food are regarded to be one of the most potent forms, that are traded by several individuals around the globe:
- Metals: Considering metals, copper is commonly used for the manufacturing process of a myriad of electrical components, this why the experts of StoxMarket always encourage investments made on copper. As copper is even essential for power transmission, making of telecom cables and wires too.
- Energy: Next, is the world’s most actively traded commodity and that is crude oil. This commodity receives world’s largest trading volume is often on high demand by the traders. Crude oil is often traded by production and exploration companies, airlines, oil refineries and other companies associated with petrochemical or other forms of industries.
- Agro: According to the experts of StoxMarket, foods receive the lowest trading volume but it does hold the potential to provide satisfactory profits. Common forms of foods that are traded in high volume include corn, wheat and soybean. In terms of foods, the region that is considered to be the core production sector is the star of attraction. As, if the region flourishes the price blooms, and when the sector goes down then same is seen in price.
Trading Techniques Used For Commodity Trading
There are four popular techniques used by traders who deal with commodity trading, and they are Options, Spot Market, Forward Contact & Futures. With options the traders have the opportunity to secure their place by using a premium that gives them right but not obligation for the trade that they make. In the spot market trade investors can trade on the current market, however additional expenditure like transportation get incorporated in it.
Forward Contact deals with a two party contract, where two parties meet at a decision and predict the future movement of commodities, and then finally the most popular and even promoted by the experts of StoxMarket is futures that involves exchange of the commodities in terms of their performance and necessities.