Commodities For Dummies, 3rd Edition

Chapter 25

Top Ten Investment Vehicles for Commodities

IN THIS CHAPTER

Investing through the futures markets

Getting exposure through equities

Uncovering the benefits of fund investing

Because the commodities markets are so wide and deep, you have a number of investment vehicles to access these markets. A common misconception among investors is that you can only trade commodities by opening a futures account. While the futures markets certainly provide an avenue into the commodities markets, you have other tools at your disposal. I list the ten most important investment vehicles in this chapter.

Futures Commission Merchant

Opening an account with a futures commission merchant (FCM) is the most direct way for you to invest in commodities through the futures markets. An FCM is registered with the National Futures Association (NFA), and its activities are monitored by the Commodity Futures Trading Commission (CFTC). When you open an account with an FCM, you can actually trade futures contracts, options, and other derivative products directly through the main commodity exchanges. Your orders are sometimes routed electronically or are placed during the open outcry trading session. ...