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What are the differences between trading in commodities & trading in stocks?


I've traded in stocks for a while, and people are recommending trading in commodities too. What are some of the more significant differences between the two? Is commodities more or less risky/profitable? Any important points to take note of?

Thanks!

!!!> Thanks for your answer. How long is the expiration date for commodities? Very roughly speaking. Days, weeks, months?

The main difference is that trading in commodity futures contracts gives you a huge amount of leverage -- that is, with a few hundred dollars of margin money, you may be able to control hundreds of thousands or even millions of dollars worth of futures. This means that you could make a great deal of money on a small investment, but it also cuts the other way -- if the market goes against you in commodities, you could lose much more than you invested. In stocks, you can only lose what you invested (unless you are using margin to purchase stocks). Also, commodities are a zero-sum gain. For every dollar you win, somebody else has to lose a dollar. This is not true of stocks, where if the company you invest in does well, everyone can make money.

Commodities have an expiration date.
Stocks don't.

Commodities are very risky and more sensitive to news and rumors than stocks.

Commodities can be more profitable than stocks.

A good website is Futuresource.com . You can find expirations, prices, charts and lots of free trader info.
Commodities expire almost every month, depending on the product. Some are every 3 months. They all have different days to expire during the month, and have different opening and closing times as well. I follow the grains, the coffee, and the bonds. But I day trade the mini SP. Its all about leverage. (little moves can be big profits or ??losses, yikes) good luck, I ve been learning for years. Good book--"new thinking in technical analysis"

One difference is that commodities are far more risky. You can lose all your money very quickly, if you're not well informed, or a beginner.

I assume you are talking about commodities futures. Futures markets are very different from the stock market, with different trading rules, margin, cost, leverage, etc.
Not to discourage you, but just because "people" are recommending that you start trading commodities, you should ask yourself why you think you can excel at this when there are thousands of commodities traders who know more than you.
Since you are already trading stocks, you may want to consider trading some of the agricultural stocks, such as Monsanto and the fertilizers companies (there are many) or the commodity and futures exchange companies (CME, ICE) or commodities advisors (FCSX), which have all benefitted from the increased focus on commodities, whether food, fuel or metals. There are also several ETF's and mutual funds that focus on different commodities that allow you to participate in this area.

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