Earn Money online by Commodity Trading

Commodity trading is a trading platform where investors buy and sell different commodities in order to Secure a good profit. Commodities usually traded in Pakistan are:

• ·         Gold
• ·         Silver
• ·         Crude OIL

Pakistan Mercantile Exchange Limited (PMEX) is the government regulatory authority which

Register brokers and make policies about secure trading and ensure investment safety.

There are many Brokerage companies available in Pakistan which deals in commodity exchange.

One only needs to open an account with one of leading brokerage houses  and  start business. But there are some precautions which should be taken before going into  commodity trade business.

·         Company should be registered with PMEX

·         Company past profile should be studied

·         Investor should keep an eye on Commodity prices daily

·         Complete study of commodity price fluctuations should be studied before investing, in order to secure your investment and gain the most of it.

There are some vocabulary used in commodity trading business which need explanation before entering into business.

·         Delivery/Withdrawal: To take physical possession of the commodity purchased

·         Leverage: The use of credit/Borrowed funds to improve your speculative capacity and increase the rate of return from investment; as in buying securities on margin.

·         Margin Trading: Trading securities with cash borrowed from a broker. This has the effect of magnifying profit/loss made on securities.

·         Margin Call: Demand by broker that a customer deposits enough to bring his margin up to the minimum requirement; caused by the decline in market price of a security purchased on margin.

·         Stop Loss: An order to the broker to sell(buy) when the price of a security fall(rises) to a designated level.

·         Gap Opening: An Opening price for a security on an exchange that is much higher or lower than the closing price on a previous trading day.

·         Risk: Uncertainty associated with any investment.

·         Volatility: How much and how quickly the value of an investment or market changes.

·         Capital Gain: When you sell an asset at a higher price than you paid for it, the difference is your capital gain.

·         Capital Loss: When you sell an asset at a lower price than you paid for it, the difference is your capital loss.

·         Risk Profile: A  measure of how risk averse an investor.

·         Threshold: A minimum where exchange will square all positions to avoid default/liability on exchanges part. This threshold is put at a time of account opening and will be adjusted according to client’s trading patterns.

Hope this post will enhance your knowledge of trading commodities .Use this knowledge to earn money online at home.Your feedback is very important don’t forget to do so……!

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