Commodity Trading Consumer Research is your guide for commodities, futures, and options trading. This article by Courtney Smith is a brief commodities guide on what to watch out for in the trading hype you come across.

 

Commodities and Futures Market Hype By Courtney Smith

You heard the hype. Some guy yelling on the radio about the big money you can make in heating oil or gold or whatever. The pitch is that the winter is coming up and that means that heating oil will make a big move and you can invest $5,000 in heating oil options and can make up to $20,000.

Of course this is hypothetically true but our advice is to run rapidly in the opposite direction when you hear such hype.

Making money in commodities and futures trading is hard. Why are these guys hyping you to invest $5,000 and why are they spending their money on radio ads instead of buying the damn options themselves? Wouldn't they make a lot more money than what you will pay them in commissions? Apparently not!

I'm a big believer in seasonals but these hypesters are not telling the truth about seasonals. For example, heating oil prices tend to go down in the winter because the commercials have already bought all the heating oil they will need so the price actually tends to rally before the winter not during.

The bottom line: if it sounds too good to be true, it is.