Trading Commodities

What are Commodities?

Commodities are any raw material or agricultural product which can be traded or used as input for the production of goods and services. These include oil, gold, soya and natural gas. Traditionally, trading commodities is an extremely risky venture as commodity traders are often faced with having to deal with the issue of high volatility in the market which brings high risk. In addition, it is also a capital intensive activity. For example, with a margin facility of 10%, it will still require a few thousand dollars just to trade one lot of crude oil. Frankly, there are not many individuals with this kind of spare cash lying around hence shutting the door to commodity trading to most people.

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