Commodities and goods trading explained.
Goods and raw materials such as petroleum products, natural gas, precious and base metals, are some of the most popular trading assets. Called commodities, they act as a separate asset class, and are relatively volatile financial instruments.
That is why, the cost varies greatly from hour to hour, from day to day. However, the volatility can become an advantage that could help the trader generate a considerable profit.
Historical volatility of most commodities, are close to the 30% mark. This means that within a year, the price of a basic commodity instrument can be changed to 30%.
These are the most significant assets within the commodities category:
- Precious metals
Gold and silver are being historically traded as a commodity product, and as a means of currency. These assets have yield curves at rates reflecting their long-term profiling.
Just as in the case of currencies, to assess this commodity and raw materials used forward point, allowing to create the forward curve. Potential inflation, as well as periods of high liquidity and generally are successful period for the receipt of the profits on gold and silver.
But beyond that, this product is also used for trade in industrial markets. Gold and silver are suitable for technical trading, and can be used for trading binary options during technical breakthroughs.
- Crude oil
For petroleum (crude oil), according to a weekly report on the status, inventory, published by the U.S. Department of Energy, is the report of trade volatility in the energy markets. This report is published weekly on Wednesdays at 14:30 (GMT). It can be found either on the official website of the U.S. Department of Energy, or on the news web-sites, as well as reports on the status and movement of stocks of crude oil, gasoline, heating oil and domestic, as well as less significant oil.
The projections, collected from different studies, in which the views of analysts on the data that will be listed in the inventory report. In general, the report shows a status and movement of stocks in the form of a report on the total funds held in different regions of the United States.
For the consideration of the factors of production of crude oil, the most important regions of America are inventories in the region Padd 2 and Cushing, Oklahoma. The region undergoing evaluation contract for unprocessed crude oil WTI NYMEX, and, for this reason, the region is of particular importance in the preparation of the report.
For gasoline and heating oil use, Padd 1 region, located in the north-eastern United States, and therefore reports its inventory, becoming the most significant. The region under evaluation contracts for gasoline and heating oil use. In addition, the Department of Energy publishes reports on demand for imports of all types of products.
A well-informed trader can use binary options volatility, which creates the publication of reports of the Ministry of Energy in order to create the most profitable deals. Options such as "hit" or "miss", as well as options "call" and "put" with interest payments to investors may be the key to profitable trading.
- Natural gas
Just as in the case of oil, the U.S. natural gas market is very volatile. To him, also published a report on the status and inventory of the Ministry of Energy, on Thursday at 14:30 (GMT). Report on the status and inventory indicates how much natural gas reserves left in the three major reservoirs of the country. A trader can use the volatility of the product when choosing "above" (call) or "below" (put), and to use a range of options (scatter) "hit" or "miss." In addition, you can also use options "One Touch» (one-touch), which can lead to quite interesting results of trades, if you buy them right before the publication of a report on the inventory, as for changes in the market, after the release of this report is also characterized by a considerable volatility.
Copper is an industrial metal, the value of which is usually dependent on the growth prospects of the price of these goods around the world. The global economy is expanding, increasing the cost of production and, therefore, raise the price of copper. In case, if the economic status of the country falls, and with it the level of building size is reduced, and for them, respectively, are also falling and the price of copper.
Taking this into account, traders may prefer to take advantage of international reports on manufacturing purchasing managers in planning the acquisition of certain binary options. You can also take into account the reports of the GDP, the country of interest, after they are published. Purchasing managers, publish reports on the U.S., the Eurozone, the UK, China and Canada (among others).