Sunday, 23 December 2007

Which Commodity Trading Contract Suitable for Individual Investors ?

Types commodity trading contracts are spot commodity contract, forward commodity contract, and futures commodity contract.

1. Spot contract
Spot commodity contract is an agreement in commodity trading that the delivery either takes place immediately or if there is a minimum lag , due to technical constraints, between the trade and delivery.

2. Forward contract
Forward commodity contract is an agreement in commodity trading between two parties to exchange at fixed future date a given quantity of a commodity for a price defined today

3. Futures contract
Futures commodity contract is similar to forward contract but is transacted through a futures exchange. http://discountfuturestrading.blogspot.com/

In my view, for individual investors, the futures contract is more suitable than others. What do you think about the best commodity contract in commodity trading?

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