How to Invest in Commodities

There are many types of orders and you can place in the market below are some of the most commonly used orders and we will use these to get you started.

Open order. This is an order there remains in force until it is filled or canceled by you or the underlying contract expires. This order is also known as a good – till – canceled order (GTC).

Date order. This order will cancel at the end of the day unless it is filled usually this type of order is the default order used on most trading platforms.

Market order. This is an order to buy or sell a futures contract immediately at whatever that market price is at the time of the order. Traders on the floor love these orders as they can make a nice profit from these orders because they will fill these orders as the price changes. This form of order is the fastest order you can make.

Limit order. This is an order to buy or sell a futures contract at a specific price or condition. For example, b December 2009 at 17.10 or below. These orders allow for better positioning and technical trading.

Stop order. This is in order to buy or sell a futures contract if the price moves to price you specify when the market price reaches your specified price is order becomes a market order. For example, buy stop one December silver contract at $17.10

Stop-Loss. This order is very similar to stop order except that is meant to offset an existing order. This order specifies to the broker that once your prices hit to close out your position and get you out of the market. This form of order allows you to manage risk. Beware just because you have a stop-loss order doesn’t mean that your order will be filled at a price you specify. Often, when markets are very volatile your stop-loss may sell off your position at a lower price than you have specified.