Global Macro and Commodity Trading
The typical image of the floor of the Mercantile Exchange being filled with a bunch of guys that couldn't get jobs anywhere else is very outdated and wrong. Instead commodity traders are increasingly becoming some of the most sophisticated investors on earth.
One of the main types of upstairs traders in the commodity markets are the CTA or commodity trading advisors. They typically do a lot of long term trend following. The second major commodity trader is the global macro trader.
Next up are the global macro traders. They are probably the second largest group of commodity traders as they look to trade disparate and uncorrelated asset classes, as well as get a better picture of global imbalances.
In 2008 for example we saw oil climb to record highs. During this time the macro trader was busy looking for what companies will benefit and what companies will get hurt by this. Yes, oil companies made out well but so did companies like MLP's and railroads. On the other hand airlines and fleet services got absolutely hammered as their fuel costs started to cut heavily into their sales.
Precious metals are another area of great concern. Long looked as a fantastic inflation gauge gold and silver are also looked upon more and more as alternative currencies since most fiat currencies are looking like junk these days. As you can see precious metals are very useful to key in on currencies and inflation.
Industrial metals are also a big deal as almost everything you buy or use has some type of metal in it. Copper for electrical wires, lead for batteries, aluminum for cans, etc. The list is virtually endless and between the MERC, the NYMEX, and the LME you can trade basically all of it. If you aren't tracking industrial metals then you are not pricing out the number one cost for most manufacturing and industrial companies.
While many investors gloss over the agricultural commodities they shouldn't. In the future agricultural commodities will only be increasing in importance as the worlds water supplies continue to diminish. If you are already monitoring demographic trends and overall supply demand you should also be following agricultural commodities.
Obviously commodities are a huge component of the global economy. Not only can you make some great trades in these markets but you can also get a better picture of what will be happening in other asset classes, kind of like the missing pieces of the puzzle. - 23217
One of the main types of upstairs traders in the commodity markets are the CTA or commodity trading advisors. They typically do a lot of long term trend following. The second major commodity trader is the global macro trader.
Next up are the global macro traders. They are probably the second largest group of commodity traders as they look to trade disparate and uncorrelated asset classes, as well as get a better picture of global imbalances.
In 2008 for example we saw oil climb to record highs. During this time the macro trader was busy looking for what companies will benefit and what companies will get hurt by this. Yes, oil companies made out well but so did companies like MLP's and railroads. On the other hand airlines and fleet services got absolutely hammered as their fuel costs started to cut heavily into their sales.
Precious metals are another area of great concern. Long looked as a fantastic inflation gauge gold and silver are also looked upon more and more as alternative currencies since most fiat currencies are looking like junk these days. As you can see precious metals are very useful to key in on currencies and inflation.
Industrial metals are also a big deal as almost everything you buy or use has some type of metal in it. Copper for electrical wires, lead for batteries, aluminum for cans, etc. The list is virtually endless and between the MERC, the NYMEX, and the LME you can trade basically all of it. If you aren't tracking industrial metals then you are not pricing out the number one cost for most manufacturing and industrial companies.
While many investors gloss over the agricultural commodities they shouldn't. In the future agricultural commodities will only be increasing in importance as the worlds water supplies continue to diminish. If you are already monitoring demographic trends and overall supply demand you should also be following agricultural commodities.
Obviously commodities are a huge component of the global economy. Not only can you make some great trades in these markets but you can also get a better picture of what will be happening in other asset classes, kind of like the missing pieces of the puzzle. - 23217
About the Author:
If you need actionable trading ideas then check out The Macro Trader It is a weekly global macro investing advisory publication with frequent intra-week updates for time-critical analysis and actionable trading ideas.
posted by X - Men @ 1:36 AM
0 Comments
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home