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#1
04-02-2008, 07:51 PM
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Commodities trading
Hey, I've been looking at trading gold & other commodities... what does that all entail, how is it different from trading stocks etc?
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08 G37S 07 G35S 
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#3
04-03-2008, 09:28 PM
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Options to me are difficult, but you can see much larger gains with options than with stocks. Some people turn 300% in a matter of days. Look into some other commodities that will inflate as the economy gets worse. Corn, wheat and soy will go up as the economy worsens so those commodities will be something to look into. If you are looking to start trading them...commodities trade on the chicago board of trade. Commodities will trade very simular to stocks. People buy and sell them on a daily basis under certain symbols. nymex crude is like cyk8 for example and gold is gcm8...thats about all i can tell you about commodities. Gold has dropped hardcore in the last week...a little over $100 an ounce. It was up a little today (like 10 cents) and the market was all over the place. Started off then went straight into the negative then it gained then it dipped into negative again and ended up closing just above fair value. An ISM report came out today that suprised a lot of people and john thain (merril lynch CEO) came out and talked telling people that ML doesn't need to raise capital as they are doing fine. Those two things ended up pulling the market back into the positives. If those two things had not happened the market probably would have had a pretty bad day as jobless claim numbers were aweful and way out of line from analyst estimates.
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2003 OB 5AT G35 coupe -|- Apexi S-AFC II -|-Injen CAI -|- Motordyne 5/16" Spacer -|- Stillen Dual Cat-Back -|- Stillen Engine Damper -|- Tein CS coilovers -|- Tein EDFC -|- 19" Volk TE37 -|- 1/4 mile = 13.86 at 100.4 (no damper or suspension) -|-
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#4
04-03-2008, 09:30 PM
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^^ Does scottrade do commodities trading?
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08 G37S 07 G35S
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#5
04-03-2008, 10:47 PM
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I don't believe so...just stocks, options and IRA type stuff. -Sean
__________________
2003 OB 5AT G35 coupe -|- Apexi S-AFC II -|-Injen CAI -|- Motordyne 5/16" Spacer -|- Stillen Dual Cat-Back -|- Stillen Engine Damper -|- Tein CS coilovers -|- Tein EDFC -|- 19" Volk TE37 -|- 1/4 mile = 13.86 at 100.4 (no damper or suspension) -|-
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#6
04-03-2008, 11:54 PM
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I was paying close attention to the IMS report as well as the jobless claims. Jobless was through the roof! Noone saw that coming, and with the IMS report coming in 0.6% higher (I believe) it was not a good day for mortgage backed securities. I've also heard that gold is likely in a bubble right now, as many other commodities are. How do you feel about wheat?
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#8
04-04-2008, 05:07 PM
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So am I. That's why I am watching the IMS reports and the jobless numbers, so I can try and track which way the MBS's are moving so I can figure out if I should lock or float. Thanks to the increase in yield on the 5.5% FNMA bond I should have seen abut a 0.625% increase in YSP this morning, the lenders have not priced it in yet though because of the dramatic nature of this morning's ramp up. I think I'll lock on Monday or maybe even Tuesday. That being said, I wouldn't say that FNMA bonds are not good right now. The FNMA 30 yr 6% bond is showing a yield of around 3%, which should keep rates nice and low. Stick with the GSE's if you're going to dabble in the MBS's.
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#9
04-06-2008, 11:05 AM
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I'm not much of a commodities trader (eg im a commodities noob), since I mostly trade stocks and bonds. However I believe that a well-balanced portfolio should include commodities so that's why I have a small percentage of my portfolio managed by a commodity broker who chooses everything for me...
I recently read a book "Hot Commodities: How Anyone Can Invest Profitably in the World's Best Market" by Jim Rogers and it was VERY VERY interesting, it actually helped me to better appreciate the STOCKS i owned. I think the 2 main ideas of the books are (and why commodities are different from stock market, to answer the OP's question) : 1) Commodities bull market run LONGER than stock market bulls, which gives the opportunity to small investors to get into the bull run for a quite a while. 2) "Usually" when the stock market slows down and is going down, the commodities market goes up (yes, i didn't know that till i read the book!) The demand in commodities is growing rapidly because of China, I think it's time for most investors to look around this very special investing tool. 
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IP G35c 2006 / Metallic black BMW X3 2007
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#10
04-06-2008, 12:15 PM
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Wheat is something i have actually been looking into for a while (not that im going to trade it..i just like to follow). I think wheat is eventually going to explode depending on what happens with corn and this whole ethanol thing. A lot of wheat farmers and other farmers are taking their crops and clearing them out in order to plant corn because the demand for corn is sky rocketing with the whole ethanol ordeal. If this continues it means we are going to start having a big shortage of wheat, which will drive the price way up. So i would say wheat would be something to possibly buy right now. -Sean
__________________
2003 OB 5AT G35 coupe -|- Apexi S-AFC II -|-Injen CAI -|- Motordyne 5/16" Spacer -|- Stillen Dual Cat-Back -|- Stillen Engine Damper -|- Tein CS coilovers -|- Tein EDFC -|- 19" Volk TE37 -|- 1/4 mile = 13.86 at 100.4 (no damper or suspension) -|-
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#12
04-08-2008, 05:33 PM
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futures and forwards can get rather confusing... OP, you might want to read into it first. get a grasp on arbitrage pricing theories, put-call relationships, etc. it's all theory, but it will give you the pricing relationships you need to know. otherwise it could get very risky and probability of losing can get high. in particular, look into arbitrage, put-call parity, backwardation, contago, cash-and-carry (and reverse cash-and-carry), and the various structure strategies.
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#13
04-08-2008, 05:39 PM
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Shortages are already happening. Many "food" commodities are very good buys at the end of a bull run and heading for a weakened economy.
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#14
04-08-2008, 05:41 PM
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With such a small portfolio/account a person shouldn't even be considering futures/commodities.
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