Author: Sharon Dawkins
Commodities trading has been another popular avenue that traders have been pursuing. This relates to trading in base metals, foods, precious metals and so on. The trading is performed in a similar manner to stocks and foreign exchange and the basis for trading is the demand supply fluctuations in specific commodities.
Just how does financial spread betting come into have fun with commodities?
The answer is simple. The high prices of certain gold and silver for instance like gold, platinum will make it hard for that common trader to purchase and stock them for trading. When they are finding stock prices expensive, one can imagine how difficult it might be to trade commodities in the physical market. Moreover, these aren't items that lend perfectly to physical trading if you don't are in the company of commodities and also have your own wholesale or retail set up. That can be one reason behind you to hedge positions by playing futures or spread betting on them.
For many traders however, commodity trading represents a chance to make quick money depending on fluctuations within the international market and it is the same advantage of leveraged trading that they can enjoy when doing financial spread betting on them. In fact the whole of this year has seen tremendous upsurge in gold, silver and platinum prices and all sorts of those who have gone long on these precious metals have made lots of money.
The volatility inside a metal like gold is also not so full of the sense that prices might not have a huge dip. This encourages traders to maintain wide stop losses to ensure that even if the price does drop, they aren't stopped out and may trade the upswing again when they do their margined trading about this metal. Oil was another commodity that was heavily traded within the futures plus the financial spread betting market towards late 2008 and that pushed up the oil prices significantly.
It has to be however mentioned that prices of commodities do follow events in the international space and it would help if you can follow those closely. In addition, local regulations also play operator with some governments increasing or decreasing duties on either import or export on certain commodities they perceive have been in short supply or perhaps in excess. This would come with an immediate impact on the market price and that's something traders need to be cognizant of.
Obtain the latest material and news on Financial Spread Betting and other thorough information today. Learn crucial facts on topics such as Financial Spread Betting FAQs.
Article Source: http://www.articlesbase.com/investing-articles/financial-spread-betting-along-with-the-commodities-market-3901155.html
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Obtain the latest material and news on Financial Spread Betting and other thorough information today. Learn crucial facts on topics such as Financial Spread Betting FAQs
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