By investing in the commodities market, it is possible to provide a level of diversification to your portfolio. The raw materials are regularly used in daily life, but because of strong demand, sometimes markets can vary drastically. Using the right strategies, you can invest and earn enough. There are several ways to invest in this sector.

The raw materials can be represented by wheat, cattle, oil, gold. From the moment traders do not want to be responsible for the transport of the material, the contracts are traded, as well as agreements for the purchase or sale of goods at an agreed price on a specific date. If the price goes up between the contract date and the date of delivery, the buyer makes the deal because it can get the product at a lower price and can sell at the highest price that the market offers. If the price drops, it is the seller who makes money because they can buy the goods at the market price lower and sell it to the buyer at the highest price agreed beforehand.

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The prices are driven by supply and demand. For example, the reason for the recent rise in oil is the tight supply and growing demand. In times of inflation, commodities are a good reason for investment, but first you must understand the risks of such an investment.

The commodity markets in the United States include the Chicago Board of Trade, the Board of Trade of New York, and the Mercantile Exchange. Today, thanks to the Internet, you can create an account with a broker and monitor real-time trading trend of the raw materials in all major markets around the world. are only required $ 5,000 to open an account. Better yet, you can practice with a dummy account before investing real money.