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Facts about LIFFE & Commodities

- Over 2 trillion Euros are traded each day across the globe.

- The options and futures exchange in London were both built in the mirror image of the Chicago Board of Trade (CBOT) and the Chicago Mercantile Exchange (CME).

- The merger in 2002 of the LIFFE and the Euronext Exchange was a strategy to make the exchange known in the derivatives market.

- Not many people know that today it is known as the Euronext LIFFE.

- LIFFE distributes all of its data and market information through LIFFE data, which gives historical, real-time, and delayed data.

- Derivatives traded on LIFFE are used by investors as a risk management tool

- The first futures contract goes back to China over 6,000 years ago.

- In 1996, the average farmer owned over 450 acres, and over 140,000 farms were owned and/or operated by women.

- Inventory decisions directly affect the price of commodities.

- Contracts on options move in increments of .10.

- Different seasons affect the prices of many commodities.

- Weather directly affects all commodities and now investors can purchase derivatives on weather by purchasing contracts.

- There is only one electronic trading system that can trade short-term interest rate futures in large volume and that is the LIFFE Connect system.

- The average daily volume for LIFFE Connect is 300 billion.

- There are over 15,000 brokers that use the electronic trading to help customers transact trades.

- The word commodity comes from the French; it was spelled “commodite’” which means to profit or benefit.

- Euribor futures contracts that are traded on the LIFFE are based on three month rates.

- The world’s oldest futures exchange is the CBOT, which was founded in 1848.

5 things to know about commodities:

1) Understand the risks and characteristics of the main sectors of the markets.

2) Research the nature of the commodity markets.

3) Segregate commodity sectors and understand the influences of each, on the overall market.

4) Watch the day-to-day market activities.

5) Understand your own risk and manage your finances accordingly.

Many investors are looking for products that aren’t backed by a company that they can’t see.  If you are looking for investments that back underlying products such as interest rates, commodity indexes, wheat, coffee, and grain commodities you should do more research.

Trading in futures and options involves a substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results.

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