Commodity futures prove to be versatile investment strategy in a variety of economic environments: Inflationary periods: In an effort to keep pace with inflation, investors have focused on the futures markets, which provide a competitive return on capital and frequently run counter-cyclically to fixed income and equity markets.
Recessionary periods: Whereas equity investments often decline in a value prior to or during recessions, futures trading may still remain profitable, for it is equally possible to profit when commodity prices fall as when they rise through the use of short sales.
Whereas the stock trader must borrow securities and pay interest in order to sell short, there are no such restrictions on commodity short sales. As a result, commodity investors are afforded an equal opportunity to profit in advancing markets and in declining markets.
|Symbol||Description||Contract Size||Execution||Spread||Stops||Tick Size||Order Validity||Margin on Hedge(Per Lot)|
|KC||Coffee “C” future contract||1 LOT = 37500 Pounds||MARKET||25 Pips (0.25)||60 Pips (0.60)||0.05||Good till day||Zero|