🛢️ Commodities Trading
📚 US Capital Private Bank Knowledge Base
📖 Definition
Commodities Trading involves buying and selling raw materials or primary agricultural products such as oil, gold, wheat, or coffee. Trading can occur on spot markets or via derivatives like futures contracts.
⚙️ How It Works
Traders buy physical commodities or enter contracts to purchase/sell commodities at future dates and prices (futures). Prices are influenced by supply and demand, geopolitical events, weather, and economic indicators.
📝 Key Features
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🌍 Physical and Derivative Markets: Includes spot, futures, and options markets.
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📅 Futures Contracts: Agreements to buy/sell at a predetermined price and date.
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💰 Hedging and Speculation: Used by producers and consumers to manage risk and by traders to profit.
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🔄 Leverage: Allows trading large commodity amounts with smaller capital.
✅ Benefits
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Portfolio diversification.
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Hedging against inflation and currency risk.
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Opportunities in global markets.
⚠️ Risks & Considerations
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Price volatility due to external factors.
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Contract expiration risks.
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Requires market knowledge and risk controls.
🔎 Related Terms
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📈 Futures Contracts
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⚠️ Basis Risk
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💹 Commodity ETFs
📚 References
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📄 Commodity Futures Trading Commission (CFTC) – Commodities Market Overview
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🌐 Investopedia – Commodities Trading Basics
📞 Contact US Capital Private Bank
📧 Email: [email protected]
🌐 Website: https://uscapitalprivatebank.com