An American Income Trust is a type of royalty trust. A royalty trust is a type of corporation created to act as the owner of the mineral rights to wells, mines and similar properties. It exists only to pass income generated from the sale of the property's assets (gold, oil, etc.) to shareholders.
Backwardation describes a downward sloping forward curve in a commodity market.This means that as the price of a commodity for future delivery is lower than the spot price -- the price of a commodity today. Backwardation starts when the cost of carry – i.e., storage, financing and convenience fees, exceeds the difference between the forward and spot price. This situation usually arises when a commodity that normally experiences contango faces a positive demand or negative supply shock.
A barrel of oil equivalent (or BOE) is a unit measure of unused energy resources.Expressed frequently in the financial statements of energy companies, BOEs are defined by the U.S.
The call rule is a rule that requires the official opening price of a cash commodity to be near the previous day's closing price of that commodity. For example, let's assume that on June 1, the price of gold is $1,000 an ounce at the end of the trading day.
A Canadian income trust is a type of investment trust that holds stable, income-producing assets and pays out at least 90% of its net cash flows to its unitholders (shareholders are known as unitholders in trust lingo).These trusts usually hold assets such as oil, coal, natural gas, or other natural resources, which generally have a steady demand and therefore steady revenues. Canadian income trusts usually have no management or employees but are instead run by financial institutions.
The Chicago Mercantile Exchange (CME) is a commodities futures and options exchange.Several dozen types of contracts trade on the CME, and the exchange facilitates hundreds of millions of these trades each year.
Commodification, also known as "commoditization", refers to a good or service becoming indistinguishable from similar products. To be considered a commodity, an item must satisfy three conditions: 1) it must be standardized and, for agricultural and industrial commodities, in a "raw" state; 2) it must be usable upon delivery; and 3) its price must vary enough to justify creating a market for it.
A commodity is a raw material that is interchangeable with other materials of the same type. Investors can participate in the commodities market on the NYMEX.
The Commodity Futures Trading Commission (CFTC), was established in 1974 as an independent government agency with the purpose of regulating commodity futures and options markets. The Commodity Futures Trading Commission was established by a government mandate in 1974 to enforce rules stated in the Commodities Exchange Act.
The e-CBOT is an automated trading platform for trading futures on the Chicago Board of Trade (CBOT). The CBOT is a commodities futures and commodities options exchange.
Gold bugs are people who are fans of investing in gold. Gold is generally considered a safe haven against the ravages of inflation and volatile markets.
The AMEX Gold BUGS Index (also known as HUI) is one of two major gold indices that dominate the market.BUGS is an acronym for "Basket of Unhedged Gold Stocks." The index was introduced on March 15, 1996.
A gold bull is someone who believes the price of gold will go up. Gold bulls generally consider gold a "safe" hedge against inflation and even against volatile markets.Throughout history, gold has traditionally risen in value when things such as wars, the Great Depression, or high inflation have occurred.
A gold certificate is a piece of paper that entitles the bearer to a certain amount of actual gold. From 1863 to 1933, the U.S.
A gold fix occurs when the The London Gold Market Fixing Ltd.sets the price of gold.
A gold fund is an exchange-traded fund (ETF) or mutual fund that invests in gold. For example, let's assume that John wants to invest in gold.
The Gold Reserve Act of 1934 nationalized gold and fixed the price of gold in terms of U.S.dollars.
The gold-silver ratio is measure of how many ounces of silver it takes to buy an ounce of gold. The formula for the gold-silver ratio is: Gold-Silver Ratio = Price of Gold per Ounce / Price of Silver per Ounce For example, let's assume that the price of gold is $1,500 an ounce today.
The Goldman Sachs Commodity Index (GSCI) is a commodities index now owned by Standard & Poor's. S&P acquired the index from Goldman Sachs on February 2, 2007 and renamed it the S&P GSCI.
The Federal Reserve Bank of New York provides, among other things, gold storage for foreign governments and central banks.This gold is in the form of bars, which allows the bank to weigh it, stack it, and move it easily.
A job lot is a commodities futures contract where the underlying commodity is denominated in smaller amounts than a regular futures contract. Commodity futures contracts are agreements between a buyer and a seller to deliver a specific amount of a commodity (for example, precious metals, oil, corn, etc.) on a future date at a predetermined price.
Joint supply is the simultaneous output of two or more products from a single process or material. Products that are generated in joint supply cannot be produced independently from one another.
A master limited partnership (MLP) is a publicly traded limited partnership.shares of ownership are referred to as units.
The New York Mercantile Exchange (NYMEX), founded in 1872, is the world's largest physical commodity futures exchange, headquartered in lower Manhattan.NYMEX handles trades worth billions of dollars in commodities that are bought and sold on the trading floor, as well as on overnight electronic trading computer systems for future delivery.
People who enjoy numismatics often have rare coins that can be quite valuable.But not all numismatics fans have to have money to keep collections.
An oil refinery is a factory that turns crude oil into marketable products such as gasoline, jet fuel, lubricants and heating oils. Refining oil is complicated, but generally the idea is to heat the crude oil, separate it out, and add things to the separated portions to formulate products.
Also called tar sands, oil sands are areas of the ground that contain a viscous form of oil called bitumen. Alberta, Canada, is famous for its oil sands, which are important sources of oil but require special extraction methods.
Palladium is a metal used in manufacturing electronics and other items. Palladium is a rare metal that is silvery white.
Petrocurrency, also commonly referred to as "petrodollars," is cash -- usually U.S.dollars -- resulting from the sale of oil and deposited by oil exporters into foreign (usually American) banks.
Pork Bellies are a major commodity traded on the Chicago Mercantile Exchange. Pork bellies are a commodity of pork products traded as a futures contract on the Chicago Mercantile Exchange since 1961.
Price basing is a way to use the prices of futures contracts to determine the retail prices of commodities. Price basing happens all the time in the media when it comes to gasoline prices.
A reserve report is filed by companies in the oil and gas industry.It estimates remaining quantities of oil and gas (reserves) expected to be recovered from existing properties.
A royalty trust is a type of corporation created to act as the owner of the mineral rights to wells, mines and similar properties. It exists only to pass income generated from the sale of the property's assets (gold, oil, etc.) to shareholders.No income tax is paid at the corporate level as long as the bulk of income (at least 90%) is passed-through to shareholders in the form of distributions or dividends. Royalty trusts are most common in the U.S.
Sour crude is a type of unrefined oil that contains sulfur. It is difficult to refine and usually fetches a lower price. Crude oil is considered sour when it has more than 0.5% sulfur.
Unconventional oil is crude oil produced by means other than a conventional oil well. Crude, unrefined oil stock is traditionally extracted from underground reservoirs through an oil well.
A vault receipt is a document that proves ownership of gold, silver or other precious metals stored elsewhere. Let's say John Doe purchases gold through a futures contract.
Wildcat drilling is the process of looking for oil and natural gas wells in non-typical areas. Drilling oil and gas wells can be a good opportunity for risk-tolerant investors, particularly if the field where the new well is to be drilled has consistently produced oil or gas or both in the past and is expected to continue.