how to purchase commodities

how to purchase commodities

The main types of trade transactions at the stock exchange are transactions with real products and futures futures transaction.

how to purchase commodities: Transactions with real products
Transactions with real products, end with the transfer of the goods from the seller to the buyer on one of the exchange warehouses. The transaction implies the existence of the goods from the seller and the possibility of its delivery stipulated in the contract term. Transactions on the commodity exchange of the real goods, depending on the term of the contract, can be «spot» or «cache» with delivery of the goods at once, or transaction «forward», in this case delivery of the goods is carried out in the future in certain periods.

how to purchase commodities: Futures transactions
In contrast to the transactions with the participation of the actual commodity, futures or futures transactions do not involve the obligations of the parties to the transaction for the supply or acceptance of the goods, but only assume the purchase or sale of the rights to the goods. If the futures contract was concluded, then it can't just be so cancelled. A fixed-term contract may only be liquidated in two ways - delivery agreed in the contract of the goods as provided for in its terms or the conclusion of the opposite futures transactions with the same amount of goods. At the conclusion of futures transactions sellers and buyers do not involve the exchange of îãîâàðèâàåìûìè in the futures contract goods - such deals lies with the purpose of generating a profit from the difference between the price of the goods at the conclusion of the contract and the price at maturity of its implementation.
how to purchase commodities: hedging Transactions

Forward transactions on the commodity exchange often used for hedging - insurance against loss due to adverse changes in the prices of the goods under transactions with the real goods. In this approach losses from transactions with real products is compensated by a profit on the futures contract, and Vice versa. The basis of the hedge is the fact, that in the theory of change of market prices of the futures contract and the goods are the same in the direction and size, in practice, however, the price is not always coincide, but still change approximately in one and the same limits. The basis of the hedge is called the difference between the price of the futures contract and the price of the contract at the real goods.
how to purchase commodities: Arbitrage transactions
In addition to the above transactions at the stock exchange, there are also arbitrage transactions. Such transactions can only afford big investors, who can afford to enter into transactions on stock exchanges in different countries at one and the same goods with the purpose of generating a profit from the difference of quotations on various exchanges.
how to purchase commodities: Options
The option is another type of exchange transactions. Under option means the right to buy or sell a specified financial instrument at a pre-agreed price within a specified period of time. The buyer of the option in exchange for the right to pay to the seller a premium, previously option transactions were called " deals with a premium of, a transaction with the guarantees against losses, deal with the privileges, as well as transactions with guarantees from the decrease and increase of the prices. Options on commodity exchanges are with futures and commodity contracts.
An option is a special kind of an exchange transaction, the risk is limited compared with the conventional futures contract, because the call option to purchase entitles, but does not oblige to buy a futures contract, the goods or íåòîâàðíóþ value at this price.
There are three main types of options: option the right to purchase or a purchase option, which is used in the game to improve, the option with the right of sale or the option to sell - it is used in the case where a trader is going to decrease prices, as well as the double call option, which is a combination of the first two types of options. The double call option gives the opportunity to its owner or to sell or buy a financial instrument on the base price, so double options apply only when a very volatile market and there is no possibility to predict the future change of direction of the price movement on the market. Double options are only used on commodity exchanges in England.
how to purchase commodities: Contracts for difference
Contract for difference is the agreement between instill the parties to exchange the difference between the opening price and closing of positions on the contract with the account of quantity of the goods, specified in the the contract. Name of the contract for difference or CFD happened from the English expression of contracts for difference. Contracts for difference for a long time were only available to large investors, and always used them as a lead instrument.

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