Commodities are traded with deposits that rarely represent more than 20 percent (and often less) of the actual value of the contract they are trading. Thus, small price movements create major changes in equity. Traders believing the supplies will be at variance with anticipated demand will speculate with positions that are long (support the price rise) or short (believe the price is too high). More likely, traders will exploit small variances in contract delivery months and strike prices (delivery prices) with a variety of trading strategies. An important part of trading is called the carry. Carry represents the difference between the margin and the full value of the contract. As a result, the longer the maturity of the commodity contract, the greater the implied interest rate charged for the amount of the commodity carried, or not paid for in the future contract. commodity tips
