Commodities Trading and Futures Speculation (Series): Contracts Specifications – Expirations
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The Blog Entry that Accompanies this Video is at: http://investorandtrader.blogspot.com/2010/03/commodities-trading-and-futures.html
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Free Issue of Airelons Market Tactics: http://davianletter.com/articles/2009/12/13/airelons-market-tactics-4
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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.
Contacts and More Contracts: Is there some vast conspiracy, in that all commodity futures have more contracts trading in active months than there is the amount of that particular commodity in the world? Is the “Comex going to default”? No. It has to do with liquidity needs, and we discuss this.
In the next few videos, I want to discuss contract specifications in greater detail. In the following vlog entry, I discuss my thoughts regarding the expiring nature of any given commodity …
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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 : 0:9:5
2 Responses to “Commodities Trading and Futures Speculation (Series): Contracts Specifications – Expirations”
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June 2nd, 2010 at 6:57 pm
That’s sort of …
That’s sort of settlement is near a horse I’ve never traveled on. I assume it’s after FND, and the remainder of the cash is asked for by the exchange.
It is only somewhat associated with the daily settlement price. It more has to do with the settlement price, in ranges. In other words, yeah … if the price of the commodity skyrockets over a few weeks, then yeah, margin will probably be going up.
June 2nd, 2010 at 6:57 pm
If you take …
If you take delivery, when do you have to pay for the delivered commodity?
I thought you had an initial margin account that increases or decreases with the daily settlement price. But when you do pay for the delivery?