How to master the volatility of #commodities?
Are you looking to master the volatility of commodities? Download the below presentation to shred a little light onto how.
The presentation touches of various topics including:
- Analysing volatility as a source of trading opportunity versus a source of risk
- What trading rules and discipline can be employed to reduce volatility
- How much volatility in an investment portfolio is “too much”?
- Understanding price drivers behind the volatility of “Global” commodities that may be stored and transported globally (oil, gold) versus “local” commodities with storage and transportation constraints (electricity, live cattle)
› Alexander Troxler Aaroe, Investment Director, NEF Asset Management, Norway, who presented this was one of Commodities Week 2011 Middle East’s speakers, this year held on the 22 – 23 October 2012 at Dubai World Trade Centre, Dubai, UAE
Overview of trading commodities
To successfully trade stock options, a trader needs to understand the volatility of stock prices. Quite simply, the volatility of a stock is the rate and magnitude of its daily price changes. Traders use two types of volatility to assess price movements. Historical volatility is calculated directly by the price movement of a stock, while implied volatility is the market’s assumption of its volatility over the lifespan of a given stock option.
The relationship between these two volatilities is what traders use to determine their trading strategies. Generally, high volatility indicates an option is overvalued and low volatility implies an undervalued option. Traders buy when options are undervalued and sell when they are overvalued.
For more information on how to master the volatility of commodities Enquire or email me for more details about attending this year’s Commodities Week 2012 Middle East’s Show – a conference that brings together local fund managers, institutional investors, brokers and traders to explore the latest commodity trading and investment strategies.