Things You'll Need:
- A stock trading account
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Step 1
First, you need to pick the sector that you are interested in investing in. Commodities include everything from precious metals like gold and silver, to petroleum products like crude oil and even to agricultural products like corn, beef or wheat. Some of these commodities have more potential growth than others.
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Step 2
Once you have picked what commodities you think will do well in the future, you need to search online for "exchange traded funds" or "etfs" and the name of the commodity you want to invest in. For example, if you want to buy gold, then you can search for "gold ETFs". Exchange traded funds will do the investing for you in the commodities market but you can buy them through a regular trading account. There is another type of financial instrument known as an "exchange traded note". These may be risker than ETFs, but work in a similar manner. Please note that ETFs and ETNs have their own set of tax consequences, so speak to a qualified accountant.
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Step 3
If you found an ETF that you are interested in, check it's average daily volume. If it's only trading a few thousand shares a day, you might have a hard time unloading it when you want to sell without selling it at too low of a price.
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Step 4
Once you have decided on the ETF or ETN that you are interested in trading, then log on to your normal stock trading account. From there, you can buy and sell the ETF or ETN just like any other stock.
Comments
LorilynFarms said
on 1/24/2009 Thank you. I was wondering about trading commodities.