Commodities Trading and Futures Speculation (Series): Contracts and More Contracts !
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The Blog Entry that Accompanies this Video is at: http://investorandtrader.blogspot.com/2010/02/commodities-trading-and-futures_18.html
My Daily Blog is at: http://investorandtrader.blogspot.com
Free Issue of Airelons Market Tactics: http://davianletter.com/articles/2009/12/13/airelons-market-tactics-4
Airelon’s Market Tactics Newsletter: http://davianletter.com/amt
This vlog entry is a continuation in a series of videos, the “Commodities Trading and Futures Speculation”, and is continued from the previous entries.
Introduction: I discussed some of the myths regarding commodities speculation, and introduce the entire series.
The Reason for the Markets Existence: We discussed that the commodity futures markets exist, to allow companies, farmers, and others involved in production within the economy to hedge themselves against catastrophic losses. This in turn, keeps unemployment lower, and reduces volatility in the economy.
Why Traders Trade Commodities: Ok, if the commercial interests use the commodity markets to protect their business profits, then why are traders in those future markets? We discussed liquidity, and that the commercial interests need that trader liquidity, in order to hedge more efficiently. Without traders, the commercial interests have a very difficult time operating in the markets.
Collective Crowd Wisdom: We next discussed the free market benefits that traders bring to table while they are trading future delivery contracts.
So let’s begin to get into some of the ‘nuts and bolts’ of the commodities, and at the same time, dispel a few myths and rumors that have persisted as of late. We’ll begin by discussing Commodity Contracts …
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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have over 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.
Duration : 0:9:17
9 Responses to “Commodities Trading and Futures Speculation (Series): Contracts and More Contracts !”
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May 29th, 2010 at 10:05 pm
Been busy with …
Been busy with other projects lately – good to see you still have your well deserved 5 star rating – clear well presented logical -keep it up
May 29th, 2010 at 10:05 pm
Nah.
Nah.
May 29th, 2010 at 10:05 pm
did that coffe have …
did that coffe have any guiness in it ?
May 29th, 2010 at 10:05 pm
you’re soo wrong… …
you’re soo wrong… love costs exactly one dime
May 29th, 2010 at 10:05 pm
Exactly. With the …
Exactly. With the liquidity, it dilutes the power of the commercial interests to start manipulating that commodities price for their own ends.
And since it’s in the future anyways, then it sort of ’strengthens’ the positive aspects of free market principles, and weakens the “manipulative ‘mega-huge’ interests eating from the plate of the little guy”
May 29th, 2010 at 10:05 pm
Thanks for …
Thanks for mentioning the divvy issue as well. Looking forward to the video.
-scott
May 29th, 2010 at 10:05 pm
Because of that …
Because of that liquidity and more contracts it is more difficult to hoard or control that specific commodity as well correct?
May 29th, 2010 at 10:05 pm
It’s there, it’s at …
It’s there, it’s at 1:11 after those introductory comments.
Well, options are for stocks, which are contracts for 100 shares of a stock either as a put or a call.
This has to do with commodity futures, which are contracts for the commodity. So when I short a commodity contract – there is another contract out there, with someone on the other side …
May 29th, 2010 at 10:05 pm
If I sell a PUT for …
If I sell a PUT for a 100 shares of stock XZY at strike 90.
I then might protect myself by buying and PUT at 80 say.
So now there’s 2 PUTs floating around for the same 100 shares
Is that why there are at times more contracts than actual stuff?
If not I’m going to have to ask you to dumb it down a little more for me.
Where’s the intro music?