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A commodity broker is a firm or an individual who executes orders to buy or sell commodity contracts on behalf of the clients and charges them a commission. A firm or individual who trades for his own account is called a trader .
In 1934, the U.S. Bureau of Labor Statistics began the computation of a daily Commodity price index that became available to the public in 1940. By 1952, the Bureau of Labor Statistics issued a Spot Market Price Index that measured the price movements of "22 sensitive basic commodities whose markets are presumed to be among the first to be influenced by changes in economic conditions.
A commodity trading advisor (CTA) is US financial regulatory term for an individual or organization who is retained by a fund or individual client to provide advice and services related to trading in futures contracts, commodity options and/or swaps. [1] [2] They are responsible for the trading within managed futures accounts.
A relative price is the price of a commodity such as a good or service in terms of another; i.e., the ratio of two prices. A relative price may be expressed in terms of a ratio between the prices of any two goods or the ratio between the price of one good and the price of a market basket of goods (a weighted average of the prices of all other goods available in the market).
Brokers may also have their own specific vetting criteria, but they are usually based on factors such as the trader's annual salary and net worth, trading experience, and investment goals (capital preservation, income, growth, or speculation).
A supply schedule is a table which shows how much one or more firms will be willing to supply at particular prices under the existing circumstances. [1] Some of the more important factors affecting supply are the good's own price, the prices of related goods, production costs, technology, the production function, and expectations of sellers.
Such interests include commodity futures, swaps, options and/or leverage transactions. [1] [2] A commodity pool may refer to funds that trade in commodities and can include hedge funds. A CPO may make trading decisions for a fund or the fund can be managed by one or more independent commodity trading advisors. [1]
Scalping is the shortest time frame in trading and it exploits small changes in currency prices. [4] Scalpers attempt to act like traditional market makers or specialists. To make the spread means to buy at the Bid price and sell at the Ask price, in order to gain the bid/ask difference.