Wednesday, March 21, 2012

The Basics Of Commodity Trading

Commodity Trading is one of the most common ways to leverage your earnings.

View Commodity and over 3,000,000 other topics on Qwiki.




Exchange traded commodities have seen an upturn in the volume of trading since the start of the decade.

During the three years up to the end of 2010, global physical exports of commodities fell by 2%, while the outstanding value of OTC commodities derivatives declined by two-thirds as investors reduced risk following a five-fold increase in value outstanding in the previous three years.The growth in prices of many commodities in 2010 contributed to the increase in the value of commodities funds under management.This was largely a result of the growing attraction of commodities as an asset class and a proliferation of investment options which has made it easier to access this market.The trading of commodities consists of direct physical trading and derivatives trading.The global volume of commodities contracts traded on exchanges increased by a fifth in 2010, and a half since 2008, to around 5 billion million contracts.Trading on exchanges in China and India has gained in importance in recent years due to their emergence as significant commodities consumers and producers.Inflows into the sector totalled over $60bn in 2010, the second highest year on record, down from the record $72bn allocated to commodities funds in the previous year.China accounted for more than 60% of exchange-traded commodities in 2009, up on its 40% share in the previous year.The bulk of funds went into precious metals and energy products.Commodity assets under management more than doubled between 2008 and 2010 to nearly $380bn.


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