I want to invest in raw materials, like corn, beef, oil, oranges, etc. I keep hearing news reports that the value of corn is going up because of alternative fuel refinement. The news quotes the price of one barrel of oil each day. As an humorous example, in the movie Trading Places with Eddie Murphy, the main characters were investing in pork bellies and oranges. How do I, a regular 9 to 5 worker, do the same? Is it similar to buying stocks? Are there stock funds dedicated to just raw materials?
2007-03-16 05:34:55 · 7 answers · asked by FREDDYN 3 in Business & Finance ➔ Investing
actually you do NOT need a commidite broker. Deutsch Bank recently came out with several ETF's dedicated to the commodities market. This link is one of them
http://www.deutsche-bank.de/presse/en/content/press_releases_2006_3098.htm?month=6&dbiquery=4%3Aetf
2007-03-16 12:16:32 · answer #1 · answered by Anonymous · 0⤊ 0⤋
By opening an account with a commodities broker (in Trading Places, the firm where main characters worked was a commodity brokerage firm).
Is it similar to buying stocks? Yes and no. The general idea is the same (you buy when you expect the price to go up and sell short when you expect the price to go down), but you are buying not just commodities, but commodities to be delivered at a certain date. Let's say you bought a stock, and it keeps going up for three years. Once you bought it, you don't need to do anything. With commodity futures, not so.
Say, you think lumber prices are going up. So you decide to buy lumber futures. Now you need to figure out which contract to buy; lumber futures on CME expire in January, March, May, July, September, and November. Let's say you bought a contract expiring in July 2007 and the lumber price goes up between now and July. July rolls around, you contract expires, and you get a bunch of money. If you think lumber prices are still going up, you need to decide which contract to buy next (this is called "rolling over").
Another difference is that with stocks, you need to put down at least 50% of the position's value when you buy it (many small investors have cash accounts, which require 100%). With futures, you trade on much thinner margins (margin requirements change over time and may be different for different contracts, but 3-5% sounds like a reasonable range for many contracts most of the time)...
2007-03-16 06:15:03 · answer #2 · answered by NC 7 · 0⤊ 0⤋
The how is answered, but as a 9 to 5 worker, how can you put in sufficient research to make money at this, and more money than you could through more passive investments?
2007-03-16 05:45:56 · answer #3 · answered by wc256764 2 · 0⤊ 0⤋
The be conscious "infant" is from the Latin, "babbiphilodentron," a uncommon and perfumy plant with bifurcate leaves and fleshy stalks. community Alpacans in the Alpacacene Valley south of the Inphantyl Valley in Tunisia procedure their roots in cotton gins and bottle it for international huge use. Little prevalent actuality.
2016-11-25 23:58:10 · answer #4 · answered by ? 4 · 0⤊ 0⤋
Open a brokerage account in Zecco and invest in the ETF DIA.
Commodities are not for you.
2007-03-16 19:52:27 · answer #5 · answered by Anonymous · 0⤊ 1⤋
You can trade here. Just search for "commodities trading" or "commodities broker"
http://www.optimusfutures.com/
2007-03-16 05:41:51 · answer #6 · answered by ropman1 4 · 2⤊ 0⤋
Follow Ropmans link...and watch your butt you can lose it in a a flash....
2007-03-16 05:43:12 · answer #7 · answered by Anonymous · 0⤊ 0⤋