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We offer a GLOBAL brokerage service to help you to make money by investing on FUTURES of COMMODITIES, FOREX, options, oil, gold, currencies, petroleum.
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INVEST ON FUTURES OF PETROLEUM, GOLD, GASOLINE, CURRENCIES ...
Petroleum and fuels are profitable Investments?
Yes! The energy sector includes the greatest companies of the world and can be a very profitable investment. The long term demand of the provisions of petroleum and its derivatives grow day with day.
During next ten years we must find more efficient ways to supply to us of fuel since the consumption grows voracious and out of control.
With a good consultant's office in the market of futures
US$20.000 could become US$50.000 in short term
LEARN MORE ABOUT INVESTING ON COMMODITIES AND FOREX (below):
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Although the negotiations in Options, Futuros and Forex, represent the possibility of obtaining extraordinary gains, also is certain that it implies a high risk level. Always remember that negotiation of Options, Futuros and Forex in the stock markets or extra-stock-exchange are not apt for all people.
What are Commodities?
What is a commodity? Raw materials and also currencies which are still traded in an open outcry market futures exchange. You can trade commodities through a commodity broker like us.
Typical commodities traded on world exchanges.
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As well as trading commodities online consider searching internet for info about commodity trading methods and commodity day trading techniques, YOU ARE RIGHT NOW AT CORRECT PLACE: Please apply now - BY FREE- using our online form in order to get the whole information to trade commodities.
Commodities futures trading involves speculating on the price of a raw material, currency or "commodity" going up or down in the future.
These days commodities are traded between world investors all trying to buy a commodity at a low price and selling at a higher price by using commodites trading strategies and commodity trading systems. These days investors can gain access to markets via commodities broker like us.
Commodity futures trading is speculative "paper" investing, i.e. it is rare for the investors to actually hold the physical commodity, just a piece of paper known as a futures contract. Because of commodities online trading systems traders dont even need to hold the paper futures contacts.
What is a Futures Contract?
A futures contract is made when buying futures in a specific commodity for a set term - the contract has an expiration date. You don"t have to hold the contract until it expires. You can cancel it anytime you like. Many futures daytraders only hold their contracts for a few hours - or even minutes!
Expiration dates vary between commodities and you have to choose which contract fits your market objective.
For example, say todays date is June 30th and you think Gold will rise in price until mid-August. The Gold contracts on LME - London Metals Exchange are available in two monthly periods - ie February, April, June, August, October and December. You would probably choose the August, October or December contracts depending on the time frame that meets your objective.
Contracts are usually more liquid nearer to expiration, i.e. there are more traders trading them. Therefore, prices are more true and less likely to jump from one extreme to the other. But if you thought the price of gold would rise until September, you would choose a contract that is "further-out" (October in this case).
There is no limit on the number of contracts you can trade (within reason - there must be enough buyers or sellers to trade with you.) Many larger traders/investment companies/banks etc. may trade thousands of contracts at a time and smaller commodity investors are able to jump in and out of markets by day trading online.
All futures contracts are standardised in that they all hold a specified amount and quality of a commodity. For example, a Pork Bellies futures contract (PB) holds 40,000lbs of pork bellies of a certain size; a Gold futures contract (GC) holds 100 troy ounces of 24 carat gold; and a Crude Oil futures contract holds 1000 barrels of crude oil of a certain quality.
A Short History of Futures Trading
Before Futures Trading came about, any producer of a commodity (e.g. a farmer growing wheat or corn) found himself at the mercy of a dealer when it came to selling his product. The system needed to be legalised in order that a specified amount and quality of product could be traded between producers and dealers at a specified date.
Contracts were drawn up between the two parties specifying a certain amount and quality of a commodity that would be delivered in a particular month...
...Futures trading had begun!
In 1878, a central dealing facility was opened in Chicago, USA where farmers and dealers could deal in "spot" grain, i.e., immediately deliver their wheat crop for a cash settlement. Futures trading evolved as farmers and dealers committed to buying and selling future exchanges of the commodity. For example, a dealer would agree to buy 5,000 bushels of a specified quality of wheat from the farmer in June the following year, for a specified price. The farmer knew how much he would be paid in advance, and the dealer knew his costs.
Until twenty years ago, futures markets consisted of only a few farm products, but now they have been joined by a huge number of tradable "commodities". As well as metals like gold, silver and platinum; livestock like pork bellies and cattle; energies like crude oil and natural gas; foodstuffs like coffee and orange juice; and industrials like lumber and cotton, modern futures markets include a wide range of interest-rate instruments, currencies, stocks and other indices such as the Dow Jones, Nasdaq and S&P 500.
Who Trades Futures?
It didn"t take long for businessmen to realise the lucrative investment opportunities available in these markets. They didn"t have to buy or sell the ACTUAL commodity (wheat or corn, etc.), just the paper-contract that held the commodity. As long as they exited the contract before the delivery date, the investment would be purely a paper one. This was the start of futures trading speculation and investment, and today, around 97% of futures trading is done by speculators.Hedging in the futures market - There are two main types of Futures trader: "hedgers" and "speculators".
A hedger is a producer of the commodity (e.g. a farmer, an oil company, a mining company) who trades a futures contract to protect himself from future price changes in his product.
For example, if a farmer thinks the price of wheat is going to fall by harvest time, he can sell a futures contract in wheat. (You can enter a trade by selling a futures contract first, and then exit the trade later by buying it.) That way, if the cash price of wheat does fall by harvest time, costing the farmer money, he will make back the cash-loss by profiting on the short-sale of the futures contract. He "sold" at a high price and exited the contract by "buying" at a lower price a few months later, therefore making a profit on the futures trade.
Other hedgers of futures contracts include banks, insurance companies and pension fund companies who use futures to hedge against any fluctuations in the cash price of their products at future dates.
Speculating in the futures market - Speculators include independent floor traders and private investors. Usually, they don"t have any connection with the cash commodity and simply try to (a) make a profit buying a futures contract they expect to rise in price or (b) sell a futures contract they expect to fall in price.
In other words, they invest in futures in the same way they might invest in stocks and shares - but by using online day trading commodities strategies.
The Advantages of Trading Futures
Trading futures contracts have several advantages over other investments:1. Futures are highly leveraged investments. To "own" commodities futures contracts an investor only has to put up a small fraction of the value of the contract (usually around 10%) as "margin". In other words, the investor can trade a much larger amount of the commodity than if he bought it outright, so if he has predicted the market movement correctly, his profits will be multiplied (ten-fold on a 10% deposit). This is an excellent return compared to buying a physical commodity like gold bars, coins or mining stocks.
The margin required to hold a futures contract is not a down payment but a form of security bond. If the market goes against the trader"s position, he may lose some, all, or possibly more than the margin he has put up. But if the market goes with the trader"s position, he makes a profit and he gets his margin back.
For example, say you believe gold in undervalued and you think prices will rise. You have £3000 to invest - enough to purchase:
- 10 ounces of gold (at £300/ounce)
- or 100 shares in a mining company (priced at £30 each)
Two months later, gold has rocketed 20%. Your 10 ounces of gold and your company shares would now be worth £3600 - a £600 profit; 20% of £3000. But your futures contracts are now worth a staggering £72,000 - 20% up on £60,000.
Instead of a measly £600 profit, you"ve made a massive £12,000 profit!
2. Speculating with futures contracts is basically a paper investment. You don"t have to literally store 3 tons of gold in your garden shed, 15,000 litres of orange juice in your driveway, or have 500 live hogs running around your back garden!
The commodity traded in the contract is only exchanged on the rare occasions when delivery of the contract takes place (i.e. between producers and dealers - the "hedgers" mentioned earlier on). In the case of a speculator (such as yourself), a futures trade is purely a paper transaction and the term "contract" is only used mainly because of the expiration date being similar to a "contract".
3. An investor can make money more quickly on a futures trade. Firstly, because he is trading with around ten-times as much of the commodity secured with his margin, and secondly, because futures markets tend to move more quickly than cash markets however an investor can lose money more quickly if his judgement is incorrect, although losses can be minimised with Stop-Loss Orders. Trading methods should include placing stop-loss orders. There are packages available for online commodities trading & day trading software for commodity traders
4. Futures trading markets are usually fairer than other markets (like stocks and shares) because it is harder to get "inside information". The open out-cry trading pits -- lots of men in yellow jackets waving their hands in the air shouting "Buy! Buy!" or "Sell! Sell!" -- offers a very public, efficient market place. Also, any official market reports are released at the end of a trading session so everyone has a chance to take them into account before trading begins again the following day.
5. Most futures markets are very liquid, i.e. there are huge amounts of contracts traded every day. This ensures that market orders can be placed very quickly as there are always buyers and sellers of a commodity. For this reason, it is unusual for prices to suddenly jump to a completely different level, especially on the nearer contracts (those which will expire in the next few weeks or months).
6. Commission charges are small compared to other investments and are paid after the position has ended.
What is investing on FOREX - Foreign Exchange ?
This section explains the basics of trading Forex online, a brief explanation of the markets and the major benefits of trading Forex online. There are also two scenarios describing the implications of trading in a bear as well as a bull market to better acquaint you with some of the risks and opportunities of the largest and most liquid market in the world.
Overview Foreign exchange:
Forex or just FX are all terms used to describe the trading of the world's many currencies. The Forex market is the largest market in the world, with trades amounting to more than USD 3 trillion every day. Most Forex trading is speculative, with only a low percentage of market activity representing governments' and companies' fundamental currency conversion needs.
Unlike trading on the stock market, the Forex market is not conducted by a central exchange, but on the “interbank” market, which is thought of as an OTC (over the counter) market. Trading takes place directly between the two counterparts necessary to make a trade, whether over the telephone or on electronic networks all over the world. The main centres for trading are Sydney, Tokyo, London, Frankfurt and New York. This worldwide distribution of trading centres means that the Forex market is a 24-hour market.
Trading Forex:
A currency trade is the simultaneous buying of one currency and selling of another one. The currency combination used in the trade is called a cross (for example, the euro/US dollar, or the GB pound/Japanese yen.). The most commonly traded currencies are the so-called “majors” – EURUSD, USDJPY, USDCHF and GBPUSD. The most important Forex market is the spot market as it has the largest volume.
The market is called the spot market because trades are settled immediately, or “on the spot”. In practice this means two banking days.
Forward Outrights:
For forward outrights, settlement on the value date selected in the trade means that even though the trade itself is carried out immediately, there is a small interest rate calculation left. The interest rate differential doesn't usually affect trade considerations unless you plan on holding a position with a large differential for a long period of time. The interest rate differential varies according to the cross you are trading. On the USDCHF, for example, the interest rate differential is quite small, whereas the differential on NOKJPY is large. This is because if you trade e.g. NOKJPY, you get almost 7% (annual) interest in Norway and close to 0% in Japan.
So, if you borrow money in Japan, to finance the trade and buying NOK, you have a positive interest rate differential. This differential has to be calculated and added to your account. You can have both a positive and a negative interest rate differential, so it may work for or against you when you make a trade.
Trading on Margin:
Trading on margin means that you can buy and sell assets that represent more value than the capital in your account. Forex trading is usually conducted with relatively small margin deposits. This is useful since it permits investors to exploit currency exchange rate fluctuations which tend to be very small. A margin of 1.0% means you can trade up to USD 1,000,000 even though you only have USD 10,000 in your account. A margin of 1% corresponds to a 100:1 leverage (or “gearing”). (Because USD 10,000 is 1% of USD 1,000,000.) Using this much leverage enables you to make profits very quickly, but there is also a greater risk of incurring large losses and even being completely wiped out. Therefore, it is inadvisable to maximise your leveraging as the risks can be very high.
Why Trade Forex?
24 hour trading:
One of the major advantages of trading Forex is the opportunity to trade 24 hours a day from Sunday evening (20:00 GMT) to Friday evening (22:00 GMT). This gives you a unique opportunity to react instantly to breaking news that is affecting the markets.
Superior liquidity:
The Forex market is so liquid that there are always buyers and sellers to trade with. The liquidity of this market, especially that of the major currencies, helps ensure price stability and narrow spreads. The liquidity comes mainly from banks that provide liquidity to investors, companies, institutions and other currency market players.
No commissions:
The fact that Forex is often traded without commissions makes it very attractive as an investment opportunity for investors who want to deal on a frequent basis. Trading the “majors” is also cheaper than trading other cross because of the high level of liquidity.
Profit potential in falling markets:
Since the market is constantly moving, there are always trading opportunities, whether a currency is strengthening or weakening in relation to another currency. When you trade currencies, they literally work against each other. If the EURUSD declines, for example, it is because the US dollar gets stronger against the euro and vice versa. So, if you think the EURUSD will decline (that is, that the euro will weaken versus the dollar), you would sell EUR now and then later you buy euro back at a lower price and take your profits. The opposite trading scenario would occur if the EURUSD appreciates.
Important Forex Trading Terms:
Spread:
The spread is the difference between the price that you can sell currency at (Bid) and the price you can buy currency at (Ask). The spread on majors is usually 3 pips under normal market conditions. For more information on the trading conditions at Saxo Bank, go to the Account Summary on your Client Station and open the section entitled “Trading Conditions” found in the top right-hand corner of the Account Summary.
Pips:
A pip is the smallest unit by which a cross price quote changes. When trading Forex you will often hear that there is a 3-pip spread when you trade the majors. This spread is revealed when you compare the bid and the ask price, for example EURUSD is quoted at a bid price of 0.9875 and an ask price of 0.9878. The difference is USD 0.0003, which is equal to 3 “pips”. On a contract or position, the value of a pip can easily be calculated. You know that the EURUSD is quoted with four decimals, so all you have to do is cancel out the four zeros on the amount you trade and you will have the value of one pip. Thus, on a EURUSD 100,000 contract, one pip is USD 10. On a USDJPY 100,000 contract, one pip is equal to 1000 yen, because USDJPY is quoted with only two decimals.
Trading Scenario – Trading Rising Prices If you believe that the euro will strengthen against the dollar you'll want to buy euro now and sell it back later at a higher price.
• You buy euro We quote EURUSD at Bid 0.9875 and Ask 0.9878, which means that you can sell 1 euro for 0.9875 USD or buy 1 euro for 0.9878 USD. In this example you buy euro 100,000, at the quote price of 0.9878 (ask price) per euro.
• The market moves in your favor Later the market turns in favour of the euro and the EURUSD is now quoted at Bid 0.9894 and Ask 0.9896.
• Now you sell your euro and get the profit You sell euro at a Bid price of 0.9894.
• The profit is calculated as follows Sell price-buy price x size of trade (0.9894 minus 0.9878) multiplied by 100.000 = USD 140 Profit (Note that the profit or loss is always expressed in the secondary currency) Trading Scenario – Trading Falling Prices If, on the other hand, you believe that the euro will weaken against the dollar, you'll want to sell EURUSD.
• You sell euro We quote EURUSD at a Bid price of 0.9875 and Ask price of 0.9880 and you decide to sell euro 100,000 at a Bid price of 0.9875.
• The market moves in your favour The euro weakens against the dollar and the EURUSD is now quoted at bid 0.9744 and ask 0.9749.
• Now you buy back your euro You buy EUR at an ask price of 0.9749. • Your profit/loss is then Sell price-buy price x size of trade (0.9875 minus 0.9749) multiplied by 100.000 = USD 1260 Profit Remember that trading EUR 100,000 as we have done in our examples, does not mean that you have to put up euro 100,000 yourself. On a 2% margin means that you have to deposit 2.0% of euro 100,000, which is euro 2,000 on margin as a guarantee for the future performance of your position. Further Reading
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