As a commodity trading consultancy firm, United FCG trades various commodities through Options contracts. Before looking at specific investment choices, it is important that to define commodities and options.
A commodity is a basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform across producers. When they are traded on an exchange, commodities must also meet specified minimum standards. The basic idea is that there is little differentiation between a commodity coming from one producer and the same commodity from another producer. A barrel of oil is basically the same product, regardless of the producer. By contrast, for electronics merchandise, the quality and features of a given product may be completely different depending on the producer. Some traditional examples of commodities include grains, gold, beef, oil and natural gas. More recently, the definition has expanded to include financial products, such as foreign currencies, indexes and cryptocurrencies. Technological advances have also led to new types of commodities being exchanged in the marketplace. For example, cell phone minutes and bandwidth.
For a more detailed explanation of commodities, click here.
Options are financial derivatives, or contracts. The contract offers the buyer the right, but not the obligation, to buy (call option) or sell (put option) the underlying asset at an agreed-upon price during a certain period of time or on a specific date. The agreed upon price is called the strike price. American options can be exercised any time before the expiration date of the option, while European options can only be exercised on the expiration date (exercise date). Exercising means utilizing the right to buy or the sell the underlying security.
Options contracts are versatile securities that offer considerable leverage with limited downside risk. A typical crude oil options represents 1,000 barrels of oil at a set price for a cost to the investor of $1,000. This means that the investor controls the option to purchase and/or sell those 1,000 barrels anytime during the life of the contract. Therefore, if the price of a barrel of oil should increase by $3 a barrel the investor can sell the 1,000 barrels and would earn a $3,000 return on the initial $1,000 investment representing a profit of 200%. On the contrary, should the price of oil drop by $3 a barrel, the investor can simply let the options contract expire as there is no obligation to purchase and effectively limit the loss to a maximum of the initial $1,000 invested. There are numerous techniques to manage the terms of an options contract investment that make it possible to limit this risk and reducing a potential loss.
For a more detailed explanation of options, click here.
There are four specific categories, with numerous options derivatives, that are primarily traded by United FCG consultants:
Crude oil is one of the most important commodities in the world. It's an unrefined petroleum product composed of hydrocarbon deposits and other organic materials that can be refined to produce usable products such as gasoline, diesel and various types of petrochemicals. If you think of oil mainly as fuel to power cars, trains, jets, and ships, you’re only seeing a tiny piece of the puzzle. Oil is a major component in the manufacture of:
• Synthetic textiles (acrylic, nylon, spandex, polyester)
Through the use of Options derivatives, it is possible to profit from favorable market conditions for any of these products. To learn more about investing in Crude Oil options, click here.
The gold market offers high liquidity and excellent opportunities to profit in nearly all environments due to its unique position within the world’s economic and political systems. Speculating through the futures, equities and options markets offer incredible leverage with measured risks. World economic conditions including currency fluctuation and inflationary economies can provide significant opportunity to profit from investment in gold through strategically well designed and executed option derivatives. To learn more, click here.
Also referred to as Foreign Exchange (FOREX) refers to the foreign exchange market. It is the over-the-counter market in which the foreign currencies of the world are traded. It is considered the largest and most liquid market in the world. Foreign Exchange has no centralized market. Instead, a foreign exchange market exists wherever the trade of two foreign currencies are taking place. It is open 24 hours a day, five days a week. This foreign exchange market exists to ease investment and trade. The primary trading centers are London, Paris, New York, Tokyo, Zurich, Frankfurt, Sydney, and Singapore. All levels of traders, from central banks to speculators, trade currencies with one another. For the astute investor, the opportunity to earn significant profits always exists in the Forex. To learn more, click here.
A cryptocurrency is a digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of this security feature. A defining feature of a cryptocurrency, and arguably its most endearing allure, is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation. Although perceived as volatile, when astute and sophisticated analysis is applied to the cryptocurrency market, the opportunities to earn significant returns while reducing downside exposure is excellent when managed with the advice of specialist. United FCG consultants have this level of expertise and can effectively provide the education and opportunities that will allow you to profit generously in the Cryptocurrency markets. To learn more, click here.