Trading commodities is a high-risk, high-reward endeavor. It can be an effective way to protect your portfolio against inflation.
It should be noted, however, that many commodity transactions lead to speculation rather than investment. Unpredictable factors such as weather, disease, and natural disasters can have a significant impact on raw material prices in the short term.
Commodity traders bet on how the price of commodities will move. When they think the price will go up, they will buy futures or go long. When they think the price will go down, they will either sell futures or go short. To speculate on price changes, in order to profit from the difference.
