Trading Term of the Day ~ OPEN INTEREST

Open Interest - The total number of futures contracts of a given commodity that have not yet been offset by opposite futures transactions nor fulfilled by delivery of the commodity; the total number of open transactions. Each open transaction has a buyer and a seller, but for calculation of open interest, only one side of the contract is counted.

Trading Term of the Day ~ OPTION

Option - The right, but not the obligation, to buy or sell an underlying futures contract at a specific price during a specified time period. (Can also mean the price of cash grain or oilseed that is equal to the underlying futures price. Example: The cash price for soybeans in the first half of July is 8.00 and at the same time, July futures are8.00.) See also "Call Option," "Put Option" and "Strike."

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Glossary of Trading Terms
Basics Of Options Trading

Trading Term of the Day ~ FUTURES CONTRACT

Futures Contract - An agreement made at prices established in the trading pit or electronic trading to buy or sell a physical commodity sometime in the future. Futures contracts are standardized agreements, which specify quantity and quality of the physical commodity. They also specify the time of delivery and exchange designated point of delivery.

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Glossary of Trading Terms
Basics Of Futures Trading

Rainy Day Trader: Commodity Trading For Beginners

Rainy Day Trader: Commodity Trading For Beginners

Commodity Trading For Beginners

Why learn about commodities?... Because the commodity markets hold tremendous opportunity for profit. But there is also significant risk of loss. Beginners must educate themselves and determine if commodity trading is suitable for them.

Did you know?.... One of the reasons why futures were created was so that the retail trader could participate in exciting commodities, some of which have made incredible gains, like the stock market indices, the grains and even orange juice.

Others are doing it... Some are dentists, others teachers, still others are construction workers or stay-at-home moms or dads. Some have university degrees while others, only a high-school diploma.

Start by requesting a Beginner's Educational Package. It's FREE!!

Trading Term of the Day ~ HEDGING

Hedging - The use of futures and options to reduce risk of price movement by establishing the opposite position of what an individual or corporation plans to do with a particular physical commodity in the future. An example would be a corn farmer that planted corn in May, sells a contract of Dec Corn futures on June 10, to offset risks of prices moving lower into the fall because he would be selling harvested corn in the future.

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Glossary Of Trading Terms