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Trading Soybean Futures and Options-9 Valid "Motivators"!

Apr 8, 2008
When soybeans are mentioned, the mind immediately turns to food items such as soy milk, tofu, etc. This is how the general population thinks, but George Washington Carver and The Chicago Board of Trade think differently! They probably visualized trading soybean futures and options!

When George W.C. wanted some other commodity to take the place of cotton in the south, something that would bring in more profits, he chose soybeans. It was only later that he discovered that soybeans had a variety of uses other than just as food! They could be be employed in the preparation of varnishes, paints, linoleum, plastic, inks and also fuel!

Realizing its huge potential, the Chicago Board of Trade put soybeans at the top of their list of popularly-traded commodities. Also, soybeans are easy to grow. Today, with the help of the South American soybean sector (more soybeans are grown here), the Board has gone in for trading soybean futures and options.

What are the advantages to trading soybean futures and options?

(1) The trading soybean futures and options market is open to one and all, especially interested investors. As a matter of fact, business owners whose businesses are closely linked to the production or acquisition of soybeans should find this an attractive proposition!

(2) There is no need to have great knowledge about agriculture or agricultural products. This is after all, a matter of trading in a particular commodity. People who sign contracts related to trading soybean futures and options will discover that thay can handle their trading tools much better, thus boosting profits.

(3) Trading soybean futures and options can be carried out at physical locations, as well as online over the Internet. Isn't this convenient?

(4) These trading contracts offer transparency, arbitrage opportunities, enhanced hedging efficiency, the existence of a worldwide benchmark, greater liquidity and financial integrity (as they are supported by the Chicago Board of Trade).

(5) Soybean oils are primarily responsible for bio diesel fuels. And if one looks around, more and more people are opting for non-pollutant and alternate sources of energy now-a-days. The future therefore looks bright, since soybeans may become a greatly desired commodity soon!

(6) Soybeans coming first in the race can be attributed to the fact that fuel products are becoming more and more expensive; this is a more viable option!

(7) Of course, price fluctuations are always there, and businesses dependent on soybeans as a raw material will be constantly wary of them.

(8) Supply of soybeans is dependent on how much can be produced during the springtime. Unpredictable weather conditions also play a role in the supply. So the supplier cannot guarantee the supply of soybeans throughout the year!

(9) Despite the ups and downs concerning supplies, it is heartening to note that the demand for soybeans is not going to come down. So investors need never fear that the market value of soybeans is going to be affected. As the demand increases, price will also increase!

Thus, as experiments to use soybeans for different purposes are underway, trading soybean futures and options promises to be a lucrative business!
About the Author
Abhishek has an uncanny insight into Trading! Visit his website www.Trading-Masters.com and download his FREE Trading Report and learn some amazing Trading tips and tricks for FREE. His tips would save you thousands and make you better at Trading! But hurry, only limited Free copies available! www.Trading-Masters.com
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