Your Questions About How To Invest In Commodities

Lisa asks…

how do commodities traders make money?

I have some friends in finacial planing and ehy have to chase people around for their money to invest with them. Do commodities traders do the same thing? do they chase people around to park their money with them and they trade on their behalf? How do they make money? I am quite new to this area but I have heard you can make a lot of money and also lose a lot of money. Do you have to study finance to go into that path or any degree will do as long as you know the right people? Can somebody alsogive me a webste where i can read some examples of how trading in comodities work? I am also looking for somebody to reccomend me a book on the subject.

John answers:

Commodity BROKERS make money on commissions. Commodity Traders make money on buying low selling high or selling high and buying low. A lot of Commodity traders, from what I know, wil work for a trading company or institution who already has cash and all they do is simply trade it to make a profit. Also Commodity traders belong to hedge funds who have money from individual investors. Then I would say the smallest percentage use there own money to trade with.

The traders don’t worry about getting the cash. Someone else does all of that work. They are given a limit to trade with, say $20K. That is all they can use to buy and sell. When they start proving themselves as a good trader then there margin account (Spending Limit) will go up to let say $35K.

Go to the Chicago Board of Trade website.

Steven asks…

I am in india. Please state how to trade in stocks and commodities in International Stock/commodity Exchanges?

I am in India. I am interested to trade in stocks and commodities traded(listed) in stock/commodity exchanges of different nations? Is it Possible? Which of the stock Exchanges offer trading facility to other nationals? If so, Please elaborate on the procedures, terms and conditions towards the same? I shall make payments only in Indian Rupees only? If so is there any ways and means to convert the Indian nation Rupees into foreign currency for the purpose of investing in stocks and commodities of investing nations and vice versa into indian Rupees? What are the rules towards the same in India? Also spell out a few service providers(institutions/brokers) operating on this field?

John answers:

You can look into the overseas trading offer given by ICICI Direct. This will enable you to invest in the U.S. Stock exchanges including Nasdaq and New York Stock exchanges.

Richard asks…

Seeking some investment knowledge?

Can anyone give some insight on how to start investing in commodities and futures?

John answers:

The economy is kinda bad right now. So be careful in what you invest. I’d go for pharmaciducal and oil along with electricty and stuff like that. It’s bound to go up, especially if you’re young and you want to hold onto the very long term investment

George asks…

Can any one explain me “Bullions”!!?

how to invest in commodity market online. i have applied for new HDFC a/c with demat and trading. for commodity trading thru this a/c wht extra i need to do?
how much returns are expected out of commodity mkt in near future?

John answers:

Gold and silver,only buy it to take possession, or buy rare coins and diamonds and lock in a safe deposit box

Linda asks…

FUTURES QUESTION PLEASE HELP Where Do You Find Out How Much To Invest Before You Can Invest On Margin?

For Futures contracts where can I find how much you have to invest?

In a certain contract on a certain commodity BEFORE I CAN INVEST ON MARGIN, and then whatever that amount is how much of the commodity can I get. For instance I am making this up but say you can buy for 1800 dollars on margin 5000 bushels of wheat which would be in actual value 13 thousand dollars? WHERE CAN I FIND THIS INFO?

John answers:

Your broker should have it or did you try www.cbot.com?

Check this out: http://www.cbot.com/cbot/pub/cont_detail/0,3206,1322+14398,00.html

Hope that helps.

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