Commodity Market Trading and Investment : A Practitioners Guide to the Markets.

Intro -- Preface -- Contents -- List of Figures -- List of Tables -- 1: Setting the Scene -- Investing and Trading via Derivatives Contracts in Commodities -- 2: Investment and Trading in Commodity Markets -- The Evolution of Commodity Markets -- The Meaning of Commodity Markets -- Commodity Price Index -- Commodity Index Fund -- Cash Commodities -- Call Options -- Commodity Trading -- Contracts in the Commodity Market -- Spot Contracts -- Forward Contracts -- Futures Contracts -- Hedges -- Swaps -- ETCs -- OTC Commodities Derivatives -- Energy -- Crude Oil and Natural Gas -- Others -- Metals -- Precious Metals -- Industrial Metals -- Agriculture -- Diamonds -- Other Commodity Markets -- Regulatory Bodies and Policies -- USA -- European Union -- 3: The Financial Commodity Markets -- Global Commodity Markets: Price Volatility -- Commodity Price Volatility -- Financial Investment in Commodities -- The Effect of Financial Investment -- The Financial Commodity Markets -- The Commodity Futures Contract -- Exchange Function -- Market Participants -- Hedgers include: -- Speculators: -- Financial Integrity of the Market -- Hedging with Futures and Basis -- The Short Hedge -- The Long Hedge -- Basis: The link between Futures and Cash Prices -- Basis and the Short Hedge -- Basis and the Long Hedge -- Importance of Historical Basis -- Basis Table notes: -- Future Hedging Strategies for Buying and Selling Commodities -- Buying Futures for Protection against Rising Prices -- Price Increase Scenario -- Prices Decrease Scenario -- Price Increase/Basis Strengthens Scenario -- Selling Futures for Protection against Falling Prices -- Price Increase Scenario -- Price Decrease/Basis Weakens Scenario -- The Basis of Ag Options -- What Is an Option? -- Underlying Commodity -- When Do Option Rights Expire? -- How Are Options Traded? -- Option Pricing -- Intrinsic Value.

Calculating an Option's Intrinsic Value -- Time Value -- Length of Time Remaining until Expiration -- Volatility of the Underlying Futures Price -- Other Factors Affecting Time Value -- Option Pricing Model -- What Can Happen to an Option Position? -- Offsetting Options -- Exercising Options -- Letting an Option Expire -- Option Hedging Strategies for Buying Commodities -- Introduction to Risk Management Strategies -- Why Buy Or Sell Options? -- Which Option to Buy or Sell? -- The Buyers of Commodities -- Strategy 1: Buying Futures -- Strategy 2: Buying Call Options -- Scenario 1: Price Rise -- Scenario 2: Price Decrease -- Selling Put Options -- Buy a Call and Sell a Put -- Comparing Commodity Purchasing Strategies -- Option hedging strategies for selling commodities -- Strategy 1: Selling Futures -- Strategy 2: Buying Put Options -- Scenario 1: Price Decline -- Scenario 2: Price Increase -- Strategy 3: Selling Call Options -- Expected Minimum Selling Price -- Strategy 4: Buy a Put and Sell a Call -- Comparing Commodity Selling Strategies -- Short Futures -- Long Put Option -- Short Call Option -- Long Put and Short Call Options -- Other Strategies for Selling Commodities -- Strategy 5: Sell Cash Crop and Buy Calls -- Flexibility and Diversity -- Options in Combinations of Other Positions -- 4: Trading Versus Investment in Commodities -- Commodity ETFs: Investing in Commodities with a Commodity ETF -- Different Ways to Invest in Commodities -- Commodity ETFs -- Commodity Stocks -- The Influence of Commodity ETFs on the Commodity Markets -- How Do Commodity ETFs Work? -- Overall Commodity Investments -- Managed Futures -- Commodity ETFs -- How to Invest in Commodities with Commodity ETFs -- What Are Commodity ETFs? -- Are There a Lot of Different Types of Commodity ETFs? -- Why Should I Buy a Commodity ETF?.

What Are the Advantages of Commodity ETFs? -- How Do I Invest in Commodity ETFs? -- The Role of Commodities in Asset Allocation -- 5: Hedge Funds and Alternative Investments in Commodities -- Commodities and Their Attraction as Alternative Investments -- What Is a Hedge Fund? -- Development of Hedge Funds -- Hedge Fund Regulation -- Fees and Management Incentive Fees -- Term Structure -- Subscriptions and Redemptions -- Lock-Ups -- Alternative Investments: Hedge Fund Strategy Classifications -- Organizational Structure -- Hedge Fund Performance -- Absolute Returns or Alpha -- The Sharpe Ratio -- Standard Deviation of Returns -- Value at Risk Versus Returns (VaR Adjust Returns Ratio) -- Benchmarks -- Ranking of Commodity Hedge Funds Versus Other Types of Asset Classes -- 6: Understanding the Fundamentals of the Commodity Markets -- A Closer Look at the Fundamentals -- Agricultural Markets -- Who? Where? What? -- Water Resources and Water Stress: A Key Driver -- Extreme Weather Events -- Droughts -- Carbon Dioxide Increase -- Livestock -- Key Countries to Watch -- Major Agri-Exporters by Currency Value -- Industrial Metals Market -- Copper -- Aluminium -- Zinc -- Nickel -- Precious metals -- Silver -- Platinum Group Metals -- Energy Market Fundamentals -- Gas prices -- Freight/Logistics Drivers -- 7: Applied Technical Analysis for Commodities -- What Is Technical Analysis? -- The Principles of Technical Analysis -- Bulls and Bears -- The Technical Analysis Bar Chart -- A History of Technical Analysis -- Trendlines -- Other Notes on Trendlines -- Support and Resistance -- Volume -- Other Types of Chart -- Candlestick Charts -- The Volume, Open Interest, and Price (VIP) Relationship -- The VIP Relationship -- Another example of the VIP relationship: -- End of Trend Signal -- Price Gaps as Price Targets -- Example of Price Gaps.

Fibonacci Retracement Levels -- Chart Reading -- Mathematical Indicators -- The Relative Strength Index RSI) -- RSI Simple Calculation Method: Example -- Moving Averages -- Interpretation -- Bollinger Bands -- Chart Patterns -- What Is a Price Chart pattern? -- How Many Groups of Chart Patterns Are There? -- Triangle Formations -- Summary -- 8: Building a Disciplined Trading Approach -- Being a Professional Trader -- Trading with the Edge -- Principles of Price Behaviour -- Cardinal Mistakes in Trading -- 9: Trade Like a Professional -- Trade Management and Exiting a Position -- Stops -- Money Management: Risk Reward -- Account Management -- Write, Trade, Plan -- Don't Trade Yourself, Trade the Market -- Record Keeping: Adding Structure to the Plan -- Managing Your Trading -- Around Your Trading Plans Develop Your Trading Approach -- Components of a Programme -- Trade and Stop Strategies -- 10: Trading Psychology -- Managing Stress -- Concentration -- Psychology of Winning -- The Winning Formula -- Getting Yourself Out of the Dark Corner of Despair -- Recovering from Losses -- Mental Toughness -- When Things Go Bad -- 11: Commodity Market Risk Management -- Risk Management in Commodity Markets -- Lessons Learnt from Banks Errors -- Market Risk -- Credit Risk -- Liquidity Risk -- Operational Risk -- Categories of Risk -- Liquidity Risk -- Leverage Risk -- Market Risk -- Counterparty Credit Risk -- Operational Risk -- Counterparty Selection Criteria in OTC Commodity Investment Products and Derivatives -- Additional Infrastructure and Operational Practices -- Staffing and Resources -- Core Accounting Processes -- Disaster Recovery/Business Continuity -- Record Keeping -- Annual Compliance Review -- Index.

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Electronic reproduction. Ann Arbor, Michigan : ProQuest Ebook Central, 2024. Available via World Wide Web. Access may be limited to ProQuest Ebook Central affiliated libraries.