Welcome to Online Trading Guide
Online Bond Trading Article
. For a permanent link to this article, or to bookmark it for further reading, click here.
ONLINE COMMODITIES TRADING -- TAKE YOUR BUSINESS A STEP FURTHER!
from:
Any layman would have heard of the term “Stock Market”. As the name connotes, it is normally associated with investments and company stocks. While this is common and probably the most popular form of trade investment, there is also such a thing called “Commodities Trading”.
Commodities trading deals with agricultural products, such as wheat, malt, sugar and corn, as well as metals, such as gold and contracts based on the purchase and trade of these goods, as opposed to the stock market which deals with all types of financial instruments, such as stocks, government securities, interest rates and indexes.
With the advent of technology, both stock and commodities trading are now traded online. For purposes of discussion, we will focus on commodities trading online.
Online commodities trading actually has its roots from eighteenth century Japan. Though some researchers argue that men traded in Persia in the years before Christ, citing evidences of primitive trading contracts for various goods. New York and Chicago are, however credited for bringing commodities trading in the United States of America during the mid-nineteenth century.
The industrial revolution ushered in new technology that include more effective tools, a number of which are capable of creating more food. This new efficiency demanded more agricultural storage, transport, and more competent circulation of produce.
At first the markets could handle the rising demand for food, but as volume grew, the commodity markets with uniform pricing and delivery became progressively more significant. A system was then developed to cope with the hoarding of goods that happen during harvest times and with the scarcity that occur before the harvest.
With the new system, buyers could arm themselves from price irregularity by closing a deal for a certain commodity that is fixed at a particular price before they have a need for it. The contract based on this system is now known as futures.
The place where all these agricultural products as well as contracts based on the agreements between buyer and seller are being traded are called commodities exchanges.
Prior to the electronic age, there are certain places designated as commodities exchanges, however, these are now conveniently available on the net. Online trading are also referred to as screen-based or electronic trading.
In online commodities trading, customers send, buy or sell orders from their computers to an electronic marketplace offered by the exchange. There is no need to have brokers act in behalf of the customers, as brokerage approvals to trade are generated electronically. The online trading screen now takes the place of the trading pit.
An advantage for online commodities trading is price transparency since the top five current bids and offers are posted on the trading screen, in full view of all electronic market participants.
These days, a meatshop owner in Germany can easily match a bid with a cattle raiser in New Zealand!
As with any investment though, an uptick in a certain commodity where one places his money could generate for him huge earnings but a drop in prices would provide the same loss. For example, assuming prices for meats would go up in the succeeding three months, a meatshop owner decides to place an order for one cow from a cattle raiser who sells it for $5.
This is to be delivered to the meatshop owner three months from when the deal is closed. They both sign a contract.The following day, cow prices rose to $6. The cattle raiser in this case loses $1 while the meatshop owner gains $1.
Multiply the earnings or losses from the above example a hundred times for huge orders and you get the picture. Any potential investor should therfore be warned that investing on these markets is very risky.
There are various trading sites available for online commodities trading. A minimum fee entitles an investor to create an account that entitles him to researches and technical analysis on listed companies, apart from actually trading online. Most have help desks and other tools necessary to assist an investor in coming up with the best possible judgment.
As online commodities trading are highly reliant on market conditions which vary from time to time, critical analysis and observance of business trends are highly encouraged.
Online Bond Trading Specific links
Online Bond Trading News
Trade Bonds with Forex Broker Markets.com - Forex News Now
Trade Bonds with Forex Broker Markets.com Forex News Now You can get commission free trading on the most popular bonds using the same tools that professional traders use to give them an edge. If you're interested in taking part in the booming bond market, Markets.com is a great online forex broker for you to ... |
Fed Wags Finger at Congress - Motley Fool
Fed Wags Finger at Congress Motley Fool In 2008, he reported no transactions; in 2009, his transactions were all in funds like Vanguard's Intermediate-Term Tax Exempt Municipal Bond Fund and Total Stock Market ETF; and his "trading" in 2010 was similar, with three of his four transactions in ... |
Auction Industry Pioneer Larry Latham Joins Proxibid - MarketWatch (press release)
Auction Industry Pioneer Larry Latham Joins Proxibid MarketWatch (press release) In the mid-1980s he aligned Larry Latham Auctioneers Inc. (LLA) with Cantor Fitzgerald's bond trading platform to liquidate hundreds of millions of dollars of financial instruments, loans and mortgages owned by failed banks and savings and loan ... |
MarketAxess Releases Year-End Review of 2011 U.S. Corporate Bond Market - EON: Enhanced Online News (press release)
MarketAxess Releases Year-End Review of 2011 U.S. Corporate Bond Market EON: Enhanced Online News (press release) NEW YORK & LONDON--(EON: Enhanced Online News)--MarketAxess Holdings Inc. (Nasdaq: MKTX), the operator of a leading electronic trading platform for US and European high-grade corporate bonds, emerging markets bonds and other types of fixed-income ... |
US Stocks Hold Gains In Mid-Day Trading; DJIA Up 32 - Wall Street Journal
 USA TODAY | US Stocks Hold Gains In Mid-Day Trading; DJIA Up 32 Wall Street Journal ... a rush of US economic data and a pair of well-received European bond auctions. The Dow Jones Industrial Average rose 32 points, or 0.3%, to 12610 in early afternoon trade, setting up the blue-chip measure to close at what would be a six-month high. US Stocks Retain Momentum In Late-Afternoon Trading; DJIA Up 28 Dow adds 45 and S&P gains for 12th day in 14 as market continues strong start ... |