Your Questions About How To Invest In Commodities

Richard asks…

How exactly does it work to trade ETN’s? When you sell an ETN, do you receive money or stocks?

I have an online brokerage account, and when I sell normal stocks for a profit, I just get the cash in my account as soon as they are sold. I can then reinvest in seconds.

Does the same happen when you sell ETN’s? Or do you receive stocks or something, and have to go through more trouble to get the actual profit in your account.

I would like to know this, because I am thinking about investing into commodities ETN’s and I have never bought/sold anything other than regular stocks before. Thanks for the info.

John answers:

ETNs are traded on a major exchange, such as the NYSE during normal trading hours. However, investors can also hold the debt security until maturity. At that time the issuer will give the investor a cash amount that would be equal to principal amount (subject to the day’s index factor).

One factor that affects the ETN’s value is the credit rating of the issuer. The value of the ETN may drop despite no change in the underlying index, instead due to a downgrade in the issuer’s credit rating.

John asks…

Commodities. How do I invest? And where is recommended?

Im looking to dabble in Commodity investing. Such as WHEAT / CORN / but mostly SOYBEANS. Anyone know where I can start? Or a recommended trading site?
Thanks you.

John answers:

You need to open a future account and trade futures contract on the selected commodities

http://www.cmegroup.com/tools-information/find-a-broker/broker-directory-na.html

Donna asks…

How does one invest in Commodities?

There is a commodity I’d like to invest in. Lets say I want to invest in Coffee or Sugar or Pigs or something. Do I just go to a stock broker or something? Is there a special commodities broker?

John answers:

I would suggest that you invest in an ETF or mutual fund that invests in the futures markets. Small investors should not mess with the Commodities market directly…even if they are qualified.

Steven asks…

how to invest in almond commodity and what is minimum price required?

i want to invest in commodity and i am engineering student, so i have limited investing amount, still i will get satisfied if i get return of 60-70 rupee daily

can you please guide me about investing in commodity and what is damn sure minimum investing amount??? currently i have saved 1500 rupee from my pocket money 🙂

John answers:

First off, 1500 rupee is not really an investable amount of money. That’s spending money not investing money.

Second, even if you could invest 1500 rupee a good result would be to make 150 rupee per YEAR not 60-70 daily. How you could think that you could make 4%/day is unknown to me.

Third, an almond futures on MCX is 500 kg of almonds @ 350 Rupee/kg = 175000 Rupee. You could probably trade it with a margin deposit of 15000-20000 rupee but it’s very risky to have only the minimum margin requirement available (you just get stopped out).

Fourth, what makes you think that even if you had the money for this that you would have a chance of making money? You clearly know less about it than everyone else trading the market and for you to make money someone else has to lose it. Not likely.

Finally, it looks to me like there is no volume in the almond futures which means it’s a crappy thing to trade anyway.

Perhaps you should just concentrate on your studies.

Lizzie asks…

how to invest in commodities?

John answers:

Http://www.bankofindia.com/viewgoldcoin.aspx

http://india.thebulliondesk.com/

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