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​Commodities trading is buying and selling raw materials through futures contracts, in which traders agree to purchase or sell a commodity at an agreed price at a specified future date. Hard commodities are natural resources such as gold, oil, and rubber. Soft commodities include agricultural and livestock products such as wheat, corn, coffee, sugar, and pork. Traders anticipating a commodity price rise may buy futures (or go long), while those anticipating a price drop often sell (or go short).

Commodities are traded either in onsite/traditional markets or via the financial commodity markets (virtual marketplaces) using futures contracts. Trading commodities is considered complex because factors such as weather patterns and political events directly influence pricing. However, even though commodities are volatile, they allow portfolio diversification.

Commodity trading has existed for a long time and has gradually evolved over the years. Nowadays, most commodities trading is executed through futures contracts (drafted legal agreements to sell or buy goods at a predetermined date). Producers and large industrial consumers prefer commodities trading because it safeguards them when a price increases or decreases.

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​Commodities trading is buying and selling raw materials through futures contracts, in which traders agree to purchase or sell a commodity at an agreed price at a specified future date. Hard...

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​In November 2024, the US will elect its 47th president, an event with impacts beyond politics. Elections impact trading and the markets.

The past market performance shows how the markets might react when a new administration enters the White House. The government faces shifting policies with a new administration regarding the economy and foreign relations, which impacts the markets.

An October 2023 Forbes Advisor reported on findings from US Bank analysts. The analysts focused on past elections to pick up patterns during election cycles. They found that the stock market became muted in the 12 months leading into the election. When a new party enters the White House, the stock market delivers 5 percent returns. Re-electing a president leads to slightly higher returns of 6.5 percent.

In the bond market, the returns leading up to the presidential election sit at 6.5 percent, less than the 7.5 percent returns they usually deliver. Furthermore, on average, the S&P, a stock market index, performs better a year after an election than the year before.

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How US Presidential Elections Impact Market Trading Returns

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​In November 2024, the US will elect its 47th president, an event with impacts beyond politics. Elections impact trading and the markets. The past market performance shows how the markets might...

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The terms "investing" and "trading" tend to be used interchangeably, but they mean different things. While both are methods of profiting or growing assets in the financial markets, each comes with its own unique style, risks, and potential rewards. As such, knowing the difference can help you determine which is best given your financial situation and goals.

An investor buys a stock, bond, or commodity (crude oil, corn, gold, etc.) and holds it in the hopes the asset's value will increase over time. A trader, on the other hand, will buy or sell an asset for a short-term profit. As such, the investment horizon represents a major difference between investing and trading.

Investors typically hold an asset for significantly longer time periods, ranging from short-term (one to five years) to mid-term (three to 10 years) to long-term (10 to 20 years). A trader, on the other hand, can stay in a trade for months to years (position trader), for days to weeks (swing trader), for part of a day (day trader), or for seconds to minutes (scalp trader).

The shorter the time frame, the more involved a trader is in their trades. This means the level of involvement also differs between an investor and a trader. Trading involves frequent transactions, as traders seek to take advantage of emerging opportunities in the market. As such, most traders, especially those trading manually, must be present to monitor and manage their trades. Investors buy and hold. They do not concern themselves with short-term market movements.

Investing and trading have a few things in common though. Both leverage the power of compounding, whereby returns on investment earn returns. However, it is investors who tend to make the most of the compounding effect due to their longer time horizon.

Profiting from the markets takes a great deal of financial analysis and market research. And given the time and effort that goes into making an informed investment or trading decision, one's availability may determine which approach to use. That said, trading can be a full-time job, especially when trading a very short time frame.

To boost the chances of profiting from the markets, one must have proper risk management. Savvy investors and traders are both risk managers first and foremost. They focus on the downside first and the upside second. Some of the risk management strategies include setting the maximum percentage loss per trade or investment position and diversifying risk by not fully investing in just one or two trades or investments.

Trading appeals to most people because of the short-term profit potential. For those looking for long-term growth, though, investing may be the ideal route. The choice of one over the other may come down to knowledge of the markets and risk tolerance. With proper risk management, a beginner investor may be able to profit by simply buying and holding, say, the S&P 500. A beginning trader, on the other hand would, will likely struggle to profit when getting started, as short-term trading presents a steep learning curve. Likewise, a risk-averse person may prefer investing to trading.

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The terms "investing" and "trading" tend to be used interchangeably, but they mean different things. While both are methods of profiting or growing assets in the financial markets, each comes with...

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Michael Franko - Driving Solutions in the Commodities Trading Sphere

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Michael Franko - Driving Solutions in the Commodities Trading Sphere

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Plainsboro, New Jersey, executive Michael Franko delivers a host of commodities trading services to corporate clients. Researching markets from a macroeconomic perspective, Michael Franko oversees an extensive hedging portfolio. His work is informed by 18 years of leadership at Willowbridge Associates, where he was tasked with risk management and the execution of wide-ranging trades.

Mr. Franko’s career in finance extends back to 1982, when he joined the Pritzker‐owned Marmon Group after graduating from Bucknell University. Initially serving clients as a member of the physical traffic department, he worked his way through various departments, from sales to foreign exchange. Ultimately joining Marmon’s Cerro Sales Corp, he traded options while working toward an MBA from Fordham University. From this came a position trading underlying futures contracts and performing risk management functions.

Mr. Franko accepted a position as vice president with Refco(Haut) Commodities in the mid-1990s, where he focused on the trading and management of a commodity portfolio. Focused on the metals markets, he primarily pursued arbitrage trading strategies. An avid golfer, he also enjoys attending New York Jets football games in his free time.