Friday, January 4, 2019
Commodity Futures - An Overview
New York-based executive Eitan Misulovin takes part in philanthropic activities that include support of Friends of Israel Disabled Veterans-Beit Halochem and Chabad Young Professionals UES. Professionally, Eitan Misulovin has achieved success as a developer and manager in the real estate sector.
In addition to his real estate work, Mr. Misulovin serves as a manager at Pinnacle Fuel LLC. Founded in 2012, Pinnacle Fuel is a merchant of physical commodities that engages in the procurement, blending and logistics of physical petroleum products and offers a variety of blend stocks and finished goods to its clients. Together, these services support the firm’s commodity trading activities and help expand its reach to end users worldwide.
Rather than trade stocks or bonds, commodity trading firms deal in commodities, basic goods that are uniform across the marketplace, such as gold, oil, natural gas or metals. Investors may use one of several means to access commodity markets. These include investing in the stock of companies involved in a specific commodity market, such as an oil company. Likewise, some exchange traded funds, mutual funds, and index funds invest in commodity markets.
Futures stand as one of the more common commodity trading techniques. A “future” is a contract in which a buyer and seller agree to a set price for a commodity. However, the actual transaction does not occur until a predetermined date. Buyers benefit from this approach in that they can avoid price fluctuations, while sellers lock in guaranteed prices.
Futures allow huge returns for investors on the right side of trades, but they are very volatile and carry a great deal of risk. Investors often include options in a futures contract that allow losses to be minimized if the price of the commodity does not move in the anticipated direction.
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