Trading Commodities – Reading Prices

Filed under: Commodities Future Articles

If you're confused by the market, you are not alone.

For a quick lesson on how this works, we do a quick overview. Most of the trades by buying from investors and selling futures contracts, rather than directly in the same trade with the goods. Most futures trading as shares or bonds. The exception is that they have an expiration date, unlike stocks or bonds. However, this type of trade can still confuse someone not familiar with this world. An elementthat part of the world and is fairly easy quotes.

Gold

Gold is a commodity that is interested at the beginning of gold traders in principle very interesting and has a track record of history. It is also very accessible and has a general appeal that is irresistible to many. For gold, the price offers are the concerns usually quite simple and relatively few.

The minimum price movement of gold are determined by the exchanges. For example, gold futures traded on ExchangeCommodity Exchange of New York, also known as COMEX, have a minimum "tick" or a movement of price of $ .10. Each futures contract offer with 100 grams, which makes the minimum tick of $ 10 per contract. This is a much larger average stock investor to use, because they are moving in general prices of $ 10 A $ 25 per share.

In this case, the citations are often present, without the dollar sign appears. Sometimes the decimal point is ignored. Therefore, the price isfrom $ 580.65 per ounce of gold could be seen as "58,065" are reported. However, it would generally shown as 580.65.

Natural Gas

Natural gas will be traded on the New York Mercantile Exchange, also known as the Nymex. On the NYMEX, is the minimum price change of a penny. All prices listed are in U.S. dollars per million metric British thermal unit, or mm BTU. Basically, a BTU a certain amount of energy that is produced by burning natural gas.

A standard contract for natural gas futures is 1000 millimeters BTU.Therefore, if the price rose from $ 35.50 to $ 36, would be an increase of $ .50, time to 1000 (standard gas futures contracts) of $ 500.

Live Cattle

A trade in live cattle futures on the CME or the Chicago Mercantile Exchange. The CME is one of the oldest and largest stock exchanges in the United States. Here are the prices in cents per hundredweight is established. A standard contract usually takes care of £ 40,000.

The minimum price movement, orHuey, is 0.025 cents, with a movement 71,125-72,125 advertising as follows:

$ 72,125 less $ 71,125 $ matches, 0100

$ 0100 times U.S. $ 40,000 equivalent to $ 400

Coffee

Coffee is what traders commodity goods "soft" used to call them different from other commodities such as metals, grains, and energy. It is based on trade in coffee, sugar and cocoa Exchange or CSCE. Its price is quoted in cents per pound. The standard contract is £ 37,500.

Minimumtick, or movement, which is $ .05, so one lowers the price of the contract as follows:

$ 37,500 views, 0005 will equal $ 18.75. Thus, if the price quoted as 115.45, the 115.45 per pound, or $ 1.1545 per pound equivalent.

Corn

Maize is an exchange with cereals, and probably the longest history. The corn was harvested in and as food for thousands of years. It 'was one of the first "forward" contracts.

Maize prices are quoted in cents per bushel.Motion to modify the price is a quarter of a cent together. A standard contract for 5,000 tons. Therefore implies a price of 290 in a cost of $ 2.90 per bushel.

Thus, if one lowers the price of the contract would mean 290-291:

Less than $ 2.91 $ 2.90 equals one cent.

After 5000 cents equal $ 50.

Thus having a movement percent of commodity prices in a contract of $ 50. The experience is very different from the rather short-term changes in stocks orBonds.

Simply changing fast, the prices of raw materials. Often change significantly in a single day. This means that the exchange of raw materials is much more volatile and therefore riskier marketing techniques can participate in. If you decide to, participation in trade of raw materials to be prepared for a short ride with plenty of adrenaline in your veins.

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