The key attraction to commodities futures trading is taking advantage of the leverage commodity brokers offer through their generous margin rates. What's margin? Margin rates are simply the 'down payment' required to buy a particular contract on gold, cattle, corn, oil, coffee, or any other traded commodity.
While commodity traders are only required to put a relatively small amount of cash into a particular trade, these traders reap the whole reward on any gains made by trading the contract. (Likewise, the trader incurs the whole dollar amount lost on a losing contract trade, which can be even greater than the initial margin deposit on the contract).
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