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A margin in commodities trading, is the amount of money you have to deposit in your brokerage account before trading a futures contract. The margin amount varies on each commodity and fluctuates with the volatility of the markets. There is an initial margin amount required when entering a contract and "maintenance" margin amount that must be kept in the account at all times during the contract holding period, which is typically lower than the initial margin. The balance of your account will fluctuate with gains and losses on the contract and if the balance falls below the "maintenance margin" amount, you get a "margin call", which means you must deposit enough money to meet the margin or close your contract. If you don't do either of these options, the broker will close the position before the balance falls to zero.
What else can I help you with?
Where can one find software for commodities trading?
Software for commodities trading can be found at a stock trading website. eTrade has software available for download. Most of the software found online for commodities trading is not free.
Which of these agencies regulates commodity exchanges and trading in agricultural metal and other commodities?
commodities futures trading commission
What is the difference between the commodities options trading and stock options?
Commodities options have a lot of advantages compared to the stock options like having a lower margin requirement, attractive premiums, diversification and fundamental bias. These advantages are based on experience with commodity trader.
Five countries who's economy depend on trading of commodities?
five countries who's economy depends on trading of commodities
What is equity trading and commodities trading?
Equity means shareholder ownership of the company. Equity is simply another partner of the company who can look over all the sectors of the company. He is a decision maker. Commodities mean products that are bought and sold. Commodities trading products are the main things. in Equity trading, you have the percentage of profit.
Where can one take part in commodity trading?
Trading commodities is done with a commodity broker. Check with the firm to be sure if they can trade commodities. Commodities brokers are required to be licensed by the National Futures Association.
What is the difference between margin trading and credit given by stock brokers?
Credit given by stockbrokers IS margin trading.
What are the advantages of buying commodities?
Trading commodities is much like trading stock, in that you can sell the contract whenever you feel you will make a profit. Another advantage is the possibility to trade commodities without upfront capital.
Who Regulates commodity exchanges and trading in agricultural metal and other commodities?
CFTC... Commodities Futures Trading Commission
Where could one Trade or exchange commodities?
Commodity exchanges or markets are the most common means of trading commodities such as precious metals, agricultural products, and energy. Stock exchanges tend to have listings for commodities trading.
What is the difference between initial margin and maintenance margin in trading?
The initial margin is the amount of money required to open a trading position, while the maintenance margin is the minimum amount needed to keep the position open.
How does commodity options trading work?
Commodity options trading are virtual transactions of purchasing and sales using raw or primary commodities. Examples of Primary commodities are oil, gold. Examples of raw commodities are cocoa and fruit.
