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Tips Before You Trade Commodities

Posted by CFTC Staff / December 22, 2014
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While most individuals do not trade in the commodities markets, below are tips that the Commodity Futures Trading Commission (CFTC) suggests you should consider before becoming involved in the markets.

  1. Always start with YOUR investment and financial goals. Make sure you know how a financial product helps you advance toward your goals.
  2. Focus on the offerer as well as the offer. Ask at least one government or self-regulating authority for background information on the individual and company offering the investment opportunity. Check the background of your financial professional at SmartCheck.cftc.gov.
  3. Know how you are compensating the financial professional working for you.
  4. Compare any promised or estimated ANNUAL returns to at least one other source for the same product.
  5. Verify any mention of consistent growth with at least one other investment product such as a mutual fund or trading strategy.
  6. Ask at least one trusted third-party source about the offer if someone approaches you (instead of when you are looking) with an investment opportunity.
  7. Believe any negative gut feeling you have and ask at least one trusted professional source about the offer. It never hurts to get a second opinion.
  8. Never work for someone else’s gain. If you must bring in other investors to see any gain, you should be very cautious, as many of these investments are fraudulent schemes.

If you have questions, are aware of suspicious activities, or believe you have been defrauded in the commodity futures, commodity options, or swaps markets, please contact the CFTC immediately at SmartCheck.CFTC.gov/report.

To learn more about protecting yourself before trading commodities, please visit SmartCheck.