How to Trade on the Commodities Market

Video Transcript

"Hello everyone, this is Chris Markowski, President of Markowski Investments and a host of the Watchdog on Wall Street radio show, here to talk about trading the commodity markets. The best tool in trading the commodity market is you go down to your local Block Buster and you rent Trading Places with Dan Akroyd, Eddie Murphy and just watch that, and that'll teach you everything you'll need to know about the commodities markets. Well, not really everything. But anyway, that movie wasn't that far off in many different ways. Commodities are different than stocks and bonds from many different ways. They tend to be stuff like, "frozen concentrated orange juice"; oil, pork barrel or pork bellies, platinum; they're various different markets for various different things that industrial companies would use. One of the more popular trading vehicles in the commodity market this past year has been the oil markets. Yes, that's right, where you get all sorts of speculators diving into this markets and driving this prices up. The interesting thing about the commodity market is, is that they never have to accept delivery of the stuff. You know, I live down Broad Street for a long time, right across in the New York Stock Exchange and I never saw anybody getting any barrels of oil delivered to them down there. Easily manipulated and there's been lot of calls for various different commodity regulation as of late because of the various different players that have come into the market. The commodity market do serve a very, very useful purpose to companies out there that needs to hedge their cost sim . If you are XYZ Airline and you want to make sure that you're going to be paying only X amount for fuel, five years down the road, ten years down the road, even next year; you can go about purchasing oil for delivery at that period of time. I've no problem with trading commodities whatsoever, I just think that people need to take delivery, if they're going to go about doing it. This is Chris Markowski, your watchdog on Wall Street."