Being a commodity trader for a few years has taught me one thing, and that is to find your niche. Once you find that niche, get as much information about that market as possible. Information is vital in trading as one would need to know the foundations of the market before being able to trade them. I found my niche in the grains market with a concentration in corn, soybeans, and wheat. My comfort level streams from seeing consistency in these markets with less outside noise that can affect the market. The majority of the reports are released during the pre and post market. During the trading hours, it is rare to find a sudden surprise that would interfere with your analysis.

I trade the front month futures contract, but there are other contracts that a trader needs to be aware of. Options on futures contracts trade alongside the commodity market in the pits and Globex. Options value the underlying asset; in this case they are the grain contracts. Knowing the specifications of the options can make a trader more aware of certain events that can change the market conditions, specifically when options are near expiration, they can cause volatility in prices as traders are looking to exercise or close out their positions. Options are good instruments that traders can utilize to manage risk and mitigate market exposure. Below are some specifications from the CBOT.

To learn more from Pratik and the guys at The Futures Room, visit their site at TheFuturesRoom.com