The futures price is more than an insurance. It is a guarantee that another party is [committed] to take delivery at an agreed upon price at some point in time in future.
Unless the world stops eating corn, rice; stop using oil, cease to build buildings, then the futures contract becomes worthless.
The main point to take away is, commodities are [tradable]; and this feature by itself puts it on the same playing field as REITs, stocks, bonds, currencies, TIPS and all other asset classes.
Why else does a commodities exchanges around the world exists for?
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The futures price is more than an insurance. It is a guarantee that another party is [committed] to take delivery at an agreed upon price at some point in time in future.
Jan 01 14:59 pm
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All Comments by silver-bullet »Commodities Are Not Stocks [View article]
Unless the world stops eating corn, rice; stop using oil, cease to build buildings, then the futures contract becomes worthless.
The main point to take away is, commodities are [tradable]; and this feature by itself puts it on the same playing field as REITs, stocks, bonds, currencies, TIPS and all other asset classes.
Why else does a commodities exchanges around the world exists for?