| Commodity Trading Q&A (No. 58): Short Selling in Commodity Trading Commodity Trading Q&A (No. 59): Foreclosure Selling in Commodity Trading |
Commodity derivatives investment is the activity of buying and selling commodity contracts at a specified price. Transaction elements such as volume, price, expiry time, commodity standards, etc. are specified in detail at the Commodity Exchanges. This allows investors to access the commodity market more easily and invest in the price of commodities without owning the actual product. Currently, commodity derivatives investment is being interested in and chosen by many investors.
In today's Commodity Trading Q&A, Industry and Trade Newspaper will continue to clarify issues surrounding the trading of commodities through the Vietnam Commodity Exchange.
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Nguyen The Manh (Ninh Thuan) asked: "After selling a goods contract, how long will it take for my money to be in my account?" Dinh Phuong Mai (Da Nang) had the same question and wanted to know: "Can I advance money to sell a goods contract? If so, what will the advance fee be?"
Commodity contract sales
One of the characteristics of commodity trading is T0 trading. T0 trading means that investors can close their positions immediately after placing an order. For example, if an investor opens a buy order, then immediately after that, without being regulated or bound by the time of holding the position, they can close the order immediately. This makes commodity trading the most flexible investment channel at the present time and has high liquidity compared to traditional investment channels.
Therefore, after selling a commodity contract (ie the investor's contract has been settled), the money will be credited to the investor's trading account immediately. As a result, the investor can flexibly use his resources to make subsequent transactions without being constrained by the time of cash flow arising after the settlement transaction.
Except for the case where the investor trades the LME 3M Metal Commodity Standard Futures Contract (3-month term), after the position is settled, the actual profit or loss will be recorded in the investor's trading account when the Contract expires.
Advance payment for sale of goods contract
After selling a commodity contract, the money will be credited to the investor's trading account immediately. Therefore, the investor does not need to advance money to trade the next contracts.
However, in case the investor trades the LME 3M standard futures contract, after the position is settled, the money is recorded in the investor's trading account when the Contract expires. If the contract has not yet reached the maturity date, the expected profit or loss is received in the Pending Profit or Loss section and is included in the net margin value of the trading account. The investor can withdraw money if he meets the withdrawal conditions of the Vietnam Commodity Exchange.
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