commodities investments


Commodities investments involve investing in futures contracts for products like cocoa or silver, or investing into energy markets.

The global commodity and energy markets provide a barometer to the condition of the world’s economies. Trends in the commodity markets include a move to electronic trading, ongoing deregulation and constant pressure to increase trading margins.

Another trend is the ever-increasing number of possible commodity markets. Traditional markets include such commodities as oil, sugar, and coffee, while the newer commodities include bandwidth, ram chips, and industry emissions.

The qualities of traded commodities are defined by the contracts in exchanges where the trading takes place. Because of the global nature of commodities, there are commodity exchanges around the world.

For example, major U.S. commodity exchange include:

  • Chicago Board of Trade (CBOT)
  • Chicago Mercantile Exchange (CME)
  • Kansas City Board of Trade (KCBT)
  • New York Board of Trade (NYBOT)
  • New York Mercantile Exchange (NYMEX)

These exchanges are also excellent educational resources on market basics, contract specifications, regulational issues, and available brokerage services.

Commodities Investments - Resources

Apart from the exchanges, there are online sites devoted to commodity market news, prices, charts, and educational resources. Many of these tools are also available if you have a brokerage account and a trading platform from your brokerage.

The brokerage platforms have become better over time, as competition has ensured that brokerages add new features and keep the prices of the platforms at free to near-free levels.

The resources for commodity market information include:

  • cnnfn.com/markets/commodities.html
  • reuters.com/financeCommoditiesHome.jhtml
  • bloomberg.com/news/markets/commodities.html

In addition to these resources that give great overall views on the commodities market news and the latest quotes, there are also good web sites for each of the commodity market areas, such as metals, grains, or energy.


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