Video Summary

Commodities trading is a way to trade on the future value of a commodity. Commodities are divided into 6 main groups: agricultural, livestock/meat, energy, forest products, metals and precious metals. The 2 main types of investors in the commodities market are commercial investors and speculative investors. There are many advantages to investing in commodities, including hedging against inflation, portfolio diversification, potential high returns and less manipulation. There are also some potential disadvantages to investing in commodities, including high risk, close correlation with the worldwide economy, physical delivery and the need for a high initial investment. Trading commodity futures does have some notable aspects that are neither here nor there in terms of positive or negative. They are leverage, diversification, market liquidity and sensitivity to economic, political and weather activity.