Often investors do not feel confident about investing in commodities but think about precious metals like silver, gold, etc…they offer a clear protection during inflation and times of economic uncertainty. They are a good source of investment even during tough times.
Trading in commodity futures is a transparent process.Thecourse of action leads you to fair price discovery which is controlledby large-scale participation. Such a huge participation also reflects different perspectives and outlook of a wider section of people who are dealing with that commodity.
Commodities are riskier form of investments with huge swings in prices.Companies either hit it right on a resource discovery or experienceheavy losses. This opens up opportunities for you to make profits in the commodity market provided you plan your investments right.
As a trader, youneed to deposit a margin with your broker which can be close to 5 to 10% of the totalvalue of contract, which is much lower considering other asset classes. Such a low margin allows you to take larger positions at a lesser capital.