CURRENCIES:

The deepest and most liquid market on earth is the interbank currency market. Each day 2 trillion dollars worth of currencies change hands in this market.  With the adoption of the Euro in the European Union, the 4 major currencies are the U.S. Dollar, the Euro, the Japanese Yen, and the British Pound.

OIL:

Currently crude oil has entered a bear market.  From its highs ($147/bbl) in 2008, the market has traded down some 40%.  One of the challenges to trading in a bear market is that the upward impulse moves tend to be very sharp and vicious, thus squeezing out short sellers.  These upward impulse moves are due to the increasing volatility of the underlying price moves.  Purchasing put options or put spreads is a useful strategy to mitigate this risk.

GOLD:

There is a way to allocate an investment portfolio to minimize risks and maximize gains.  Many investors hold commodities to protect themselves from unanticipated inflation that results from inclement weather, currency devaluations, or war.  In 1999, commodity prices, measured in inflation-adjusted terms, reached levels equal to those of the lows experienced in the 1930's.  The price of gold hit a low of $250 per ounce in 1999.  But, it tripled in value by May 2006 and has returned more than 20% to investors over the past eight years.

COPPER:

The explosion of copper prices began in early 2004 when the Chinese construction boom created a demand for copper.  This boom fueled a quadrupling of copper prices by May 2006.   A few hedge funds have profited from a long gold, short copper position since those highs were made in 2006.   Relative value trades such as this one are very common in the world of commodity trading.  While copper remains in high demand, there is great possibility for trading in copper substitutes as well.  Aluminum substitutes for copper in power cables, electrical equipment, radiators and refrigeration tube.   Titanium and steel are used in heat exchangers, optical fiber substitutes for copper in some telecommunications equipment, and plastics substitute for copper in water pipe and plumbing fixtures.

CORN:

Despite the increased demand for corn for ethanol production there is a controversy over the fact that more fossil fuels are burned in the process of converting corn into ethanol than in its energy content.  Therefore, corn may not be a sustainable alternative fuel to oil.  Nonetheless, corn remains an important world food source, and whether demand arises from the need to produce ethanol or the need to provide food, it is clear that corn will continue to be a vital commodity for trading.

NICKEL:

Nickel is traded in six tonne lots on the London Metal Exchange, the world's largest non-ferrous metals market.  The Exchange was founded in 1877 and traces its origins back to 1571 and the opening of the Royal Exchange.  The Exchange was closed over WWII and did not re-open until 1952.  The LME's eight metal contracts are copper grade A, primary aluminium, standard lead, primary nickel, tin, special high grade zinc, aluminum alloy, and North American Special Aluminium Alloy (NASAAC). The plastic contracts are polypropylene (PP) and linear low density polyethylene (LL).