Exchange Traded Commodities: In Summary

Submitted by Sharemarket News on 1 July, 2011 - 18:04

Everything about Exchange Traded Commodities.
  • ETC exposes investors to commodities without having to buy the commodities directly. Examples of ETCs traded on the ASX are over gold and silver.
  • The ETC tracks the spot price of the underlying metal.
  • ETC price depends on the price of the underlying metal and the AUD-USD exchange rate.
  • ETC trading hours are the same as ASX regular trading hours.
  • Metal ETCs is composed of a metal share and a metal entitlement. The value of the ETC lies in the entitlement.
  • The two main risks with ETCs are underlying commodity price and currency risk.
  • A strong Australian dollar against the US dollar works against you.