Welcome to Commodities Trading Guide at Trading Broker dot org!
Commodities Trading Canada Article
. For a permanent link to this article, or to bookmark it for further reading, click here.
Commodities Trading in the Eyes of the Producers and Traders
from:
If you will go to the market, you will find hundreds to thousands of different items sold everyday. You can purchase raw foods such as fresh meat and fish, various household items, clothes, pairs of shoes, and other products by paying a particular amount of money. Once you have obtained the item that you want and the seller received a certain amount of money from you, both of you constituted a trade.
In economics, trade is defined as the voluntary exchange of goods or services within an agreed exchange rate. The amount of money that you paid to the vendor in exchange for the item you want to obtain determines the agreed exchange rate of that item between you and the seller. In other words, the involvement of money (paper money or credit) as the trading medium further simplified the trade by establishing an agreed rate where the items will be traded.
Trade exists for various reasons. Because of the partition of labor and specialization, most individuals focused on the small aspect of production and later on trading their products for other products produced by other regions. Whatever reason it may be, the existence of trade greatly contributes to the development of the economy of a particular area or region.
In addition, trade is already an integral part of the history, where it is believed to have taken place throughout the recorded human history. Long before the invention of modern-day currency as the trading medium, trade is conducted on different parts of the world, particularly in the cradle of early civilizations. There is said to be an evidence of trade during the Stone Age.
Furthermore, various long-range trade routes are established in the 3rd Millennium, B.C wherein the Sumerians (one of the natives of Mesopotamia) traded with the Harappan civilizations situated in the Indus Valley. Phoenicians were considered to be sea traders, where they have routes across the Mediterranean Sea and established trade colonies on some parts of the European continent.
Thus, it leads to the existence of various trading markets at present. There you have the stock market, the foreign currency market, and other markets that offer trade of different items. One of the most popular markets, especially for most of producers, is the commodities trading market.
You will be able to understand commodities trading better if you know well what is being traded. In commodities trading, commodities are commonly traded. According to Karl Marx, a commodity is “any external object or thing, which through its qualities satisfies human needs of whatever kinds”. When he speaks of commodities, he always points out the “physical properties” of the commodity, which he associates with the use value of that object.
Therefore, commodities trading is the trade of various commodities and derivative products. Aside from the physical trade of the products, it is also the trade of the futures contract (the purchase or selling of an object at a particular date in the future within an agreed price) of the commodity to be traded.
Commodities trading works this way: For instance, you are a rice farmer. You can sell a future contract on your rice which will not be harvested for several months. You will be given an assurance that you will be paid for the agreed price of your product when you have delivered to your client. In the same manner, your client will purchase the futures contract now and will be given a guarantee that the price of your rice will not increase when it is delivered.
In other words, both of you will benefit from the commodities trading—it will protect you from any price drop that can happen and your client from any possible price increase of the commodity he wants to obtain in the future. Commodities trading is simply a guarantee and protection for any market instability that may happen in the near future.
Commodities Trading Canada News
Commodities Sink Stocks as Jobs, Housing Boom: Corporate Canada
Canada’s commodity shares have fallen to their cheapest prices since the recession, wiping out the stock market’s best start to the year since 2004 as global economic concerns overshadowed the best two-month job growth in more than 30 years.
Read more...Manitoba Hydro Selects RiskAdvisory for Commodities Trading Risk Management
Manitoba Hydro Selects RiskAdvisory for Commodities Trading Risk Management
Read more...Canada Currency Tumbles as Europe Crisis Overshadows Data
Canada’s dollar dropped the most since November, falling for a third straight week as concern Europe’s debt crisis will worsen overshadowed government data showing inflation and factory sales rose more than forecast.
Read more...Oil still looking for a bid
The sell-off in risk commodities continues as we near the end of another week of trading and investing. Markets do not like uncertainty and that is about all there is around the world right now. The highest level of uncertainty is coming from Europe with Greece holding the top spot followed by Spain. Last night Moody's downgraded 16 Spanish banks.
Read more...Mercuria hires Goldman commodities investment executive: source
Swiss-based trading house Mercuria has hired Goldman Sachs' former co-head of commodities investment, Shameek Konar, to help manage its global portfolio of energy assets, a source familiar with the firm ...
Read more...BlackRock Investments Canada Inc. Announces Final May Distributions on Certain Exchange Traded Funds
BlackRock Investments Canada Inc. Announces Final May Distributions on Certain Exchange Traded Funds
Read more...BlackRock Investments Canada Inc. Announces May Distributions on Big Bank Big Oil Split Corp.
BlackRock Investments Canada Inc. Announces May Distributions on Big Bank Big Oil Split Corp.
Read more...