Hargreaves
Lansdown Derivatives, Options, Futures and Warrants
Hargreaves Lansdown Derivatives, Options,
Futures and Warrants
ETF's
investing in or tracking a commodity are usually referred
to as Exchange Traded Commodities or ETCs. They can either
be backed by a physical commodity or by commodity futures.
In
the past, investors have had to purchase shares in commodity
companies in order to gain exposure to commodities. Whilst
this does provide exposure, it is an indirect exposure which
means that the commodity company share price can still fall
even if the commodity actually rises in value. ETCs now provide
investors with direct access and exposure to these commodities
and with that the ability to further diversify their portfolio.
There
are a number of single commodity ETCs but ETC Index Securities
are also available, made up of a number of commodities.
ETCs
that are backed by commodity futures carry an added counterparty
risk.
For
further information on Hargreaves Lansdown Derivatives, Options,
Futures and Warrants visit the Hargreaves Lansdown website.
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