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Concept: Commodities
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  Tropical storms generally send commodities up on a short term play

Tropical Storm season generally makes a splash on the commodities scene sending the future prices way up. This is most recognizable in the Oil Markets. With Tropical Storm Fay making its way towards the southern tip of Florida, we’re going to start with the energy markets this week, since a big chunk of oil and natural gas supplies are located near this area in the Gulf of Mexico.

Last we checked, the crude oil September futures contract topped out at $147.90/barrel on July 11. But as you probably know, it’s dropped like a rock, down to its current level around $114 a barrel – $34/barrel from its high.

That equates to a $34,000 move on one futures contract alone. There’s a possibility it could fall further, but not surprisingly, we’ve seen some volatile action today, as Fay swirls towards south Florida.

However, current projections have the storm steering clear of the major oil platforms in the Gulf of Mexico. And when the short-term dust settles, the downward move could end with oil landing at the $108 area. That would put it right at the 200-day moving average line, which would be its last hope for a bounce.

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  4 ETF commoditieses to long

If you want to gain exposure to the often lucrative commodities world, here’s why you should trade these ETFs. Why?

  1. Simple: ETFs trade like stocks, so you can buy and sell them as you would with shares of any other company from a regular stock brokerage account. So you don’t even need to get involved with commodity brokers, futures, or futures options contracts.
  2. Options: The ETFs also have options available, which offers you more leverage and can reduce your risk.
  3. Liquidity: Because all four of these ETFs are the largest ones available for their respective commodities, there is enough volume to be able to get in and out quickly and safely.

Here are 4 fast rising ETFs -

  • Oil: United States Oil Fund USO
  • Natural Gas: United States Natural Gas Fund UNG
  • Gold: SPDR Gold Shares GLD
  • Silver: iShares Silver Trust SLV

references

"Four Easy Ways to Trade the World’s Top Commodities" Article from InvestmentU

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  Albergo Mimi

ruzica.apostolova@ita.uist.edu.mk

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