eoin

I agree with clouiscar’s explanation.
Futures provide direct investing. Buying a share of a company that invests in commodities would be indirect investment.

kkn006

Good question…and great way to think about it Maratkus

eoin

From my notes:
Direct: Entails cash market purchase of physical commodities, or exposure to changes in spot market values via derivatives, such as forwards and futures
Indirect: Involves the acquisition of indirect claims on commodities, such as equity in companies specializing in commodity production (i.e. buying a share of BHP, SQM)

d2rockstar

very good question GOSETGO but im gonna have to go with direct.

IAmNeil

Direct.
Indirect would be investing in a company that creates or processes the commodity; e.g., mining, oil refining, farming.
(Interestingly, before I got to Stalla several years ago (as Level III Curriculum Manager), they had this wrong: they classified it as indirect.)

chunty

Hmm.. how relevant is ths in real world? Doesn’t matter if its direct or indirect.