INVESTING: Commoditiy Investing checklist




Investing in commodities is an alternative to investing in stocks or bonds. Commodities exchanged are raw goods, often raw food and meat.


  1. Commodities are traded as futures contracts
  2. Livestock, minerals, meat, and energy are often traded commodities
  3. Forwards contracts are agreements to pay now, and receive delivery later
  4. Contracts are usually traded several times and not always executed
  5. Contracts can be used to hedge against other investment positions
  6. The largest exchange is the New York Mercantile Exchange
  7. Spot Trading is when the delivery takes place immediately
  8. Specific requirements exist for the minimum quality of each commodity
  9. Politics can have a drastic impact on the futures contract prices
  10. Supply and demand for commodities is the primary price determinant

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