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How volatile are commodities?
Commodities are more volatile than most assets. The supply-demand dynamics of commodities are continuously changing, and sometimes very rapidly. Different commodities will have different levels of volatility, of course. Some commodities are extremely volatile. For example, natural gas has had a volatility of almost 45% in some periods, and gold has experienced movements of 20-30% per year lately. Crude oil prices fell some 50% in 2015, as a global supply glut was met with weakening demand, particularly from China. Gold is actually on the less-volatile side of the spectrum for commodities. Silver, Nickel, and crude oil tend to be on the upper end of the spectrum along with exotic metals such as platinum and palladium. Continue reading...
Best Crude Oil Stocks: Navigating the Volatile Energy Landscape
Unearth the secrets of the crude oil industry! From industry giants like Exxon Mobil to the intricate dance of geopolitics and technology, discover the vast potential and challenges of the energy sector. Ready to fuel your investment journey in the world of black gold? Continue reading...
What is the relationship between crude oil and natural gas prices?
When commodity prices rise, there is an impact on how people travel, how goods are shipped, and how people formulate their budgets. In comparing the rise of natural gas vs. oil prices, both have an impact on the consumer. For instance, when home heating prices climb, people have to decide whether or not they can afford to turn up their thermostats. Furthermore, when various goods have become more expensive because their components also cost more, people have to make difficult choices on what to buy. The price of oil affects individual spending choices as well as the budgets of corporations and governments. Continue reading...
What is commodity-product spread?
The commodity-product spread is the difference between the price of a commodity and the price of the products at the next level of consumption which is made from the commodity. In the oil industry, this is known as the crack spread, in the soybean industry, it is known as the crush spread. Some pre-packaged long/short futures strategies that trade on this spread are offered on futures exchanges. The commodity-products spread is the difference in prices between a raw material and a product made from it, such as raw crude and gasoline. This difference gives a rough estimate of production costs and profit margin. Continue reading...
Exploring Top-Performing Stocks in Oil Marketing
The oil marketing sector, a critical component of the energy industry, plays a pivotal role in refining and distributing petroleum products. This article delves into the leading companies within this domain, offering insights for investors eyeing opportunities in this segment. Continue reading...
Top Companies and Trends in Oil and Gas Exploration
The oil and gas exploration and production sector is a critical component of the global energy market. This article provides an in-depth analysis of notable companies in this sector, highlighting their operations, market capitalizations, and the overarching themes that impact their performance. Continue reading...
How do I Invest in commodities?
Commodities can be acquired through brokerage services that can access the commodities markets, or you can buy the stocks of companies that bring commodities to market. Investors can also gain exposure to commodities through mutual funds and ETFs that focus on them. There are a few ways to invest in commodities. One simple way is to purchase the stock of companies that produce commodities. You can also invest through futures contracts, which are agreements to buy a certain amount of a commodity at a certain price at some point in the future; this is the primary way that commodities are traded. They can also trade at spot, which means at the current price, or through the use of other derivative instruments, such as options on futures contracts. Continue reading...
Why Should I be Extremely Careful with Commodities ETFs?
There are some things to keep in mind when investing in commodities and their ETFs. Most commodities trading revolves around who owns a hard asset and when. ETFs occupy a space in the commodities world that is somewhat unique. An ETF such as the Crude Oil Index does not physically buy millions of barrels of oil and store them. It buys financial instruments which theoretically should reflect the price of oil. Continue reading...
Exploring Top Oil Refining Stocks
In the dynamic landscape of the oil industry, the Oil Refining/Marketing segment has emerged as a critical player, especially in the context of fluctuating oil prices. This article delves into the most notable companies in this sector, highlighting their market positions, strategies, and potential for growth. These companies, renowned for their roles in refining crude oil into various petroleum products and marketing them, are the linchpins of the downstream oil and gas business. Continue reading...
How can commodities be used as a hedge within a portfolio?
Discover the power of commodities in your investment portfolio! Learn how they act as a hedge against inflation and provide diversification. Explore the world of hard and soft commodities, and find out how to invest in them. Maximize your portfolio potential with this essential guide. #Investing #Commodities #PortfolioDiversification Continue reading...
What is a commodity index?
Commodity indexes are also called commodity price indexes, and they are informational services which reflect the price action in a designated commodity or basket of commodities. Indexes are often tracked by mutual funds or ETFs, and these can be confused with the actual index. Indexes are computed and published by market research firms. They can serve as benchmarks against which the performance of a specific asset or an investment portfolio can be compared, or they can serve as the model that index funds seek to emulate. Continue reading...
What is the U.S. Dollar (USD) and Why Does It Dominate the Global Economy?
The U.S. Dollar (USD) isn't just a currency; it's a symbol of global economic dominance. As the official currency of the United States, the USD has evolved over centuries to become the world's primary reserve currency, influencing global trade, forex markets, and international reserves. From its early days anchored to the gold standard to its modern-day status as a free-floating fiat currency, the journey of the USD is a testament to the economic prowess of the USA. Its stability, global acceptance, and role in oil trade (petrodollars) further amplify its significance. Moreover, with the advent of digital currencies, the USD continues to adapt, as seen with the USDCoin. As we navigate the intricate world of finance, the USD stands tall as a beacon of trust, stability, and strength, shaping the financial destinies of nations and individuals alike. Dive in to unravel the story of the world's most influential currency. Continue reading...
What is Income Per Capita?
Income for an area or country it totaled up and divided by the total population of the area to give us the Income Per Capita statistic. Per capita is Latin for “by head,” and income per capita takes every man, woman, and child into account. Income per capita is a statistic that divides the total amount of income reported in an area by the total population of the area. This shows us how much income, as a resource, is available on average to each person in the area. Continue reading...
What is commodity paper?
Commodity paper is the contract for a loan which is secured by collateral in the form of a commodity held in a warehouse or in transit. This is basically a form of warehouse financing, where the inventory in storage is verified and the changing level of inventory insures a larger or smaller line of credit from the lender. In this arrangement, however, there is one agreed-upon loan and collateral amount. Continue reading...
What are futures markets?
Futures markets are the formal exchanges on which futures contracts are bought and sold for commodities, financial products, and interest rates. Futures markets constitute a large part of the financial system and are an attempt by participants to hedge against some of the volatility and risks to which they might be exposed as time passes, especially where contracts await resolution or payment. Futures contracts might be created for financial instruments, commodities, and other derivative interests. The Chicago Mercantile Exchange, the Intercontinental Exchange (ICE) and the Eurex Exchange are large parts of the international network of futures markets and clearing houses. Continue reading...
What Are Futures in the Stock Market? A Comprehensive Overview and Practical Guide
Dive into the world of futures in the stock market. Explore the significance of futures contracts, their types, and the balance between risk and reward. Learn the history and the role of traders in shaping the futures landscape. Continue reading...
What are the fundamental principles of commodities trading?
Unlock the world of commodities trading! Explore its history, market dynamics, and investment strategies. Gain insights into metals, energy, livestock, agriculture, and discover how to invest through futures, stocks, ETFs, or mutual funds. Diversify and seize opportunities in this historic market. #CommoditiesTrading Continue reading...
How to Trade Moving Averages: The Death Cross?
The Death Cross is the inverse of a Golden Cross: a chart pattern occurring when a security’s short-term moving average crosses underneath its long-term counterpart, typically followed by an increase in trading volume. A death cross, which like a golden cross most commonly uses long-term 50-day and 200-day moving averages to detect the pattern, usually signifies an incoming bear market to traders. Continue reading...
What is the definition of Natural Gas Liquids (NGL), and how can they be categorized into different types?
Unveil the Power of Natural Gas Liquids (NGLs): Discover Types & Uses 🔥 Explore the world of NGLs, valuable components extracted from natural gas. Learn about their categorization, from condensate to LPG, and how they fuel industries from plastics to heating. 🚀 #NGLs #EnergySolutions Continue reading...
What is the definition of a trading desk?
Uncover the heart of finance with our in-depth guide on Trading Desks. Discover the pivotal role they play in the bustling world of securities trading. From defining their purpose to exploring their diverse types, we'll take you behind the scenes of these dynamic financial nerve centers. #TradingDesks #FinanceExploration Continue reading...