What is the good side and bad side of Commodity trading?
- Commodity prices cant become zero as there is a demand of a commodity every time unlike a share of particular company.
- In case, prices of commodity one bought in futures goes against, he/she can take physical delivery from exchange and kept in a warehouse.
- One can make handsome returns if trade commodities according to seasonality of the commodity.
- Primary physical surveys can give actual price direction of the commodity unlike a company which can manipulate its data according to their needs.
- Due to lower volumes, there is a heavy fluctuation in the market.
- Excess operating and manipulation in the market due to lack of big players like Banks etc.
- Operator intentionally hit the Stop loss first as they knows where the majority of Stop losses are. So, one has to maintain a bigger Stop losses or many times have to kept the stop losses in mind.
