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What are the advantages of Commodity Trading?

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For traditional producers and commercial consumers of commodities the advantages are obvious, but we�re more concerned with the advantages for speculators. Some of those advantages include:

Tradability: Due partially to the presence of other speculators, it�s not difficult to buy or sell commodity futures. Additionally, commodity futures offer an advantage over normal securities in that they�re not subject to the uptick rule, so they can routinely be sold short.
Leverage: When a futures contract is sold or purchased, the trader isn�t required to pay the full value of the contract. Instead, the trader pays only a margin amount predetermined by the commodities exchange. As a result a trader may invest only a small sum for a position on a hefty futures contract.
Lower Commission Costs: The purchase of a futures contract involves much smaller commission fees than those you would pay if you actually wished to purchase the commodity itself.
Simplicity: There are thousands and thousands of stocks from which an investor may choose, which can make any such choice quite difficult. In contrast, while there are enough commodities markets to allow for portfolio diversification, fewer than 100 are truly viable -- commodity trading is less overwhelming as a result.

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