Trading is no longer an exclusive club with limited access, says Tommy Grisafi, president and CEO of Indiana Grain Company and a 20-year veteran trader who specializes in commodities. The days of trading commodities only in the grain pits at the Chicago Board of Trade are long gone.
"You can do what I do, today, if you take advantage of the latest tools and technologies," Grisafi says.
Farmers can start trading electronically for about $5,000, Grisafi says. Here’s what you need to get set up:
- Make sure you have a good phone, preferably an iPhone.
- Get a new computer with two screens. "We have a friend who makes our computers," Grisafi says. He buys his computers from a company called Trading Computers.
- Pick up a broadband card. "I have a router box for $300 and I just plug the different cards in as I need them. I can drive across the country in my RV and always have internet access because of my broadband cards," he says.
If you do start trading, do not get rid of your broker, Grisafi says. He says you need someone executing the trade.
"Often, the most opportune time for you to market your crop is probably when you are out working in the field. So if you want to market your own grain, fine. But I personally think you need a good broker, professional. You have execution risk of clicking yourself," he says.
Grisafi cautions that electronic trading is not for everyone. But for farmers who want to take a shot at trading the crops they grow, they can do it for a nominal startup cost and from their own home, he says.
See all of the news, photos, videos and more from the 2012 Top Producer Seminar in Chicago, Ill.