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.
and Futures Market Hype By
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.
course this is hypothetically true but our advice is
to run rapidly in the opposite direction when you hear
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?
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.
bottom line: if it sounds too good to be true, it is.