Commodity EFT's & ETN's : What Are They?

Commodity ETFs (exchange traded funds) attempt to track the price of a single commodity, such as gold or oil, or a basket of commodities by holding the actual commodity in storage, or by purchasing futures contracts. Because futures provide leverage (more exposure than the actual cash invested), ETFs that use futures contracts have uninvested cash, which they usually park in interest-bearing government bonds. The interest on the bonds is used to cover the expenses of the ETF and to pay dividends to the holders. Commodities ETFs that use futures can and have have diverged significantly from the price of the hard commodities themselves.

ETNs have to track the price of the commodity closely. Commodity ETNs (exchange traded notes) are non-interest paying debt instruments whose price fluctuates (by contractual commitment) with an underlying commodities index. Because they are debt obligations, ETNs are subject to the solvency of the issuer..

Commodities-related ETFs generally track the producers of commodities, such as mining companies. While the financial performance of those companies -- and thus their stocks -- may be highly leveraged to the underlying commodity, other factors can impact the profitability of production. The ETFs, therefore, may not reflect the performance of the underlying commodity. For example, gold miners are highly leveraged to the discovery of gold deposits, exchange rates and their relationships with the countries where gold deposits are found.

How To Use Them and Why :

Commodities are a separate asset class from stocks and bonds, so they provide extra diversification in a portfolio. In contrast to stocks and bonds, commodities are not income generating. Thus ownership of commodities, including via ETFs or ETNs, is a pure bet on prices via Supply and Demand . The expenses charged by the ETF and ETN providers and in the cost of storing hard assets or trading futures eat away at the underlying value of the fund.

Commodity ETFs and ETNs can also be used as a hedge. For example, if you consume a large amount of gasoline and heating fuel and are concerned about the impact on your income of a rise in oil and gas prices, buying an oil and gas ETF can help offset your exposure. If You’re a producer of a good you can lock in a price for it and be hedged against price declines.  

Forex Market Symbols with Leverage
Dollar Index Double long is UUP , Double Short is UDN
Euro Double long URR  Double Short DRR
Yen Double Long YCL, Double Short YCS

Simple Forex Market Symbols   Japanese Yen FXY  Australian Dollar FXA  Swiss Franc FXF  Mexican Peso FXM   Canadian Dollar FXC  Indian Rupee ICN  Brazilian Real BZF British Pound FXB Euro FXE

Energy commodity baskets ETFs
DEB or ETN UBN, RJN, JJE.
Oil is available as a simple long USO, USL, OIL, DBO, OLO,Leveraged long UCO,or Short SZO, DNO Double short DTO, SCO.
Simple Longs ETF for Heating Oil UHN
Simple Long for Gasoline UGA.
Natural gas is available as an ETF UNL, UNG or ETN GAS.

Precious metals are Baskets DBP, PSAU
Gold is available as a simple long GLD, IAU, SGOL, DGL, UBG leveraged long DGP, UGL, short DGZ and double short DZZ, GLL . Silver,a simple long SLV, SIVR, DBS, USFV, leveraged long AGQ  and double short ZSL position. Platinum simple long PPLT, PTM, PGM and short PTD. Palladium comes only as a simple long PALL. ETFs containing gold and silver related stocks - the gold miners and junior gold miners GDX, GDXJ.

Broad commodity indexes/ baskets 
GCC, GSG, DBC and ETNs UCI, GSC, DJP, GSP. leveraged broad commodity ETF UCD, a leveraged broad commodity ETN DYY, and a double-short broad commodity ETF CMD and
ETN DEE.   ETFs which track the stocks of companies in the agricultural commodity business are CUT, MOO.

Agricultural commodities ETN
COCOA: NIB    COFFEE:JO  COTTON : BAL   SUGAR :   SGG .  Agricultural Baskets are available for Livestock: UBC, COW, GRAIN:  JJG, GRU, SOFTS which include coffee , sugar, ect  JJS, BIO FUEL:  FUE  and FOOD:  FUD.
Broader agricultural indexes are also available via ETF DBA ETN UAG, JJA, RJA

Industrial commodities ETN’s  are Aluminum JJU, Copper JJC, Lead LD,  Nickel JJN  Tin JJT

Industrial metal baskets are also available via ETF DBB and ETF UBM, JJM, RJZ.  ETFs are available which track the stocks of companies in the industrial commodities business PKOL, KOL, SLX, HAP