Buy & hold long dated commodities

[Uncle Festivus]

Certainly, if the generally accepted consensus proves correct, and the current global downturn turns out to be no more than a pause (albeit a harsh and perhaps lengthy one) to the developmental plans of many emerging countries, particularly China, then the implication of the current round of mining closures is that metals prices will eventually increase and perhaps surmount their record highs.​

This was from a metals analysis report. Now if this does eventuate, what instrument(s), futures, warrents, cfd's etc and which provider can I/we take advantage of this probability? The criteria would be -

• Long term 'investment' 2-3 yrs
• Flexibility in opening & closing the position, ie preferably via online platform
  [*]
  Security of provider & funds on deposit​
  [*]
  Minimal holding costs ie long interest​
  [*]
  or, leveraged ie on margin,​
  [*]
  not have to continually roll over the position at expiry if in profit​

Basically, what would be the best way for leveraged direct exposure into the possible upside to a second commodities bull, from a perspective of buying now & selling in 2-3 years time? Avoiding equities as even the existance of some companies may be in doubt 2-3 years from now ie avoid equities, have direct exposure to long term commodities prices?​

 

[Trembling Hand]

What size holding? Or more importantly how much wiggle room you want? If your got a stop of $1000 or $10,000 will depend on what you use.

 

[Uncle Festivus]

TH, hit me with both options then, what have you in mind? If the case is compelling enough then I go for it. Looking further, how about long time frame CRB index or similar? It's scraping along the bottom with a little (only?) support from China restocking at bargain prices. Maybe another shakeout to the lows when they are finished then start looking for the long, long plays?

The chart says it all, except for the PM's, and we know how much you like them

 

[Ageo]

This was from a metals analysis report. Now if this does eventuate, what instrument(s), futures, warrents, cfd's etc and which provider can I/we take advantage of this probability? The criteria would be -

• Long term 'investment' 2-3 yrs
• Flexibility in opening & closing the position, ie preferably via online platform
  [*]
  Security of provider & funds on deposit​
  [*]
  Minimal holding costs ie long interest​
  [*]
  or, leveraged ie on margin,​
  [*]
  not have to continually roll over the position at expiry if in profit​

Basically, what would be the best way for leveraged direct exposure into the possible upside to a second commodities bull, from a perspective of buying now & selling in 2-3 years time? Avoiding equities as even the existance of some companies may be in doubt 2-3 years from now ie avoid equities, have direct exposure to long term commodities prices?​

UF i asked this before re: oil and it seems besides ETF's there isnt really much you can do regarding long term holdings of commodities unless you hold the physical (and with some commodities thats just unpractical).

 

[Trembling Hand]

With futs outside the PM you only have Copper, Alum and uranium.

If you like one of these there are options out to mid 2011. But ya gonna pay some premium on them, Probably Wayne could help.

For the CRB index you have this,
https://www.theice.com/productguide/productDetails.action?specId=37

Which is a big contract and it only trades current + 3 next quarters. I think. So even options are out then.

CFDs are out because they, I think, only have front contract and the interest will kill ya.

So I guess that leaves, like Ageo has said, ETFs. Probably US based and the risk involved in them. Maybe Options on them? Certainly you will be able to position size better with etfs rather than futs.



http://etf.stock-encyclopedia.com/category/commodity-etfs.html

 

[Trembling Hand]

Whoops, the LME. Zinc, Steal, Nickel & Lead as well but some prob big contracts,

 

[juw177]

Avoiding equities as even the existance of some companies may be in doubt 2-3 years from now

Huh? It is not possible to have a commodities boom (except gold) in the absence of inflation. Inflation implies rising equities amongst other symptoms like rising wages, rising property prices, cheap credit. All of which do not look like will be returning any time soon.

China boom is finished and even if they do continue developing urban ghost towns, people will still be reluctant to speculate on commodities simply because of the economic conditions.