How To Buy Commodity Futures Guide

: Most traders like Sarah and Alex never actually touch the physical coffee. Instead, they "liquidate" or close their positions before the delivery date.

The story of buying commodity futures is best understood through the lens of a "Standardized Agreement," where two parties—a (like a farmer) and a speculator (like a trader)—lock in a price today for a transaction that happens later. 📖 The Tale of the Coffee Roaster and the Speculator how to buy commodity futures

: Three months later, a freeze in Brazil causes coffee prices to jump to $1.50 per pound. : Most traders like Sarah and Alex never

: Alex is "short" (he promised to sell at $1.10). Since the price is now $1.50, he is facing a loss. he is facing a loss.