Commodities Trading Explained
Trading commodities usually work as a hedge against inflation or unfavorable conditions of the market (e.g. the monsoon, if we’re talking about farming). Gold can be used as a hedge in case the economy collapses.
The most popular way of trading commodities is through a futures contract on a specialized exchange. The futures contract is an agreement to buy or sell a particular amount of a commodity at a specified time and price. By doing this, big businesses who are users of a certain commodity can protect themselves from violent price swings.
How To Trade
In order to start trading, all you have to do is to create an account at Fannexx, deposit funds, sign in to the application – and go for it.
When trading commodities you must meet a minimum balance requirement. After you have put in the required amount, you need to think about your investment strategy. Do you want exposure to a lot of commodities as a way to diversify your portfolio? Do you want to make a profit on the performance of a particular commodity? Choose the commodity you want to purchase, the month when the contract expires and the number of contracts.