Forex , Option, and Commodity? are they the same or different?
April 19, 2010 by
Filed under forex options
I’m confuse. i want to start trading but not sure what the differents between Forex , Option, and Commodity? whats is less risker but higher returns? thanks for all your answers. I really like this Q&A in yahoo. so many smart people here and its great to have there ideas on things.
Forex – this is the foreign exchange market in which currency pairs are traded such as the USD/CAD. Within this market you can trade the spot market, which is the most recent price changes, similar to buying and selling stocks, typically through the use of leverage (for every $1 put up you could control $100). You can also trade futures and options on the future price of currencies. The more leverage you use the more risk but the higher the potential return.
Optios – this is a contract that gives you the right but not the obligation to buy the underlying security at a set price before a set date. A call option gives you the right to buy while a put option gives you the right to sell. While you effectively control a lot more of the underlying security with a smaller outlay with an option they are a risky investment for the average investor.
Commodities – in terms of the commodity market this is simply the trading of commodity products such as oil, gold, beef, etc. The typical way to trade these are through futures, which is a contract to purchase or sell the underlying commodity at a set price by a set date. This market is considerably more advanced and risky for the average investor.
For more information on each:
Commodities – http://www.investopedia.com/articles/trading/05/021605.asp
Forex –
http://www.investopedia.com/university/forexmarket/
Options -
http://www.investopedia.com/university/options/
For forex you can learn more at
http://the-forex-trading.blogspot.com