GUIDE TO TRADING COMMODITIES ONLINE

     Commodities markets are markets where raw materials & primary products are exchanged via commodity exchanges throughout the world. Each exchange deals with a selection of specific commodities.
     Common commodities are agricultural produce - grains/cereals/oilseed, cattle/hogs/meat products, and softs/food/fibre.
     Commodities markets are generally used by speculators wanting to take advantage of price fluctuations, or for "hedging" which is the process of safeguarding against detrimental price movements. Speculators choose trading in commodities over other investment opportunities because of certain advantages such as low commission charges, the speed at which deals can be made & the potential to make large profits due to rapid price fluctuation. Hedgers trade in a certain commodity to ?insure? their transactions against adverse price changes. In some industries, agriculture for instance, hedging can be compulsory in order to protect against an unfavourable harvest. Purchasing a future in the commodity a farmer produces will provide a profit should the harvest be poor due to adverse weather or pestilence because the same commodity will be in short supply generally. It is fairly uncommon for a future in a commodity to actually result in delivery of the product as futures change hands & are eventually liquidated.