How to Trade Commodity Futures

"The most important thing to remember is the risk of leverage puts you at risk of losing substantially more than you put in," adds Hansen. "An inexperienced investor would be hard pressed to manage the positions, and there are so many other [investment] products available which might be better."

For many investors, that may mean looking toward some of the new commodity exchange-traded funds (ETFs).

For people not wanting to pick a specific commodity to invest in, such as gold or soybeans, but still want general exposure to commodities, then the iPath Dow Jones-AIG Commodity Index TrustDJP, could be a good ETF to pick, according to Dan Roe, chief investment officer at wealth management firm, Budros, Ruhlin & Roe, in Columbus, Ohio.

The iShares S&P GSCI Commodity-Indexed Trust GSG is a similar investment product, with a slightly different mix of components.

Narrower investment products, which track either a thin slice of the commodity segment, or a single item are also available including: streetTracks Gold SharesGLD, which tracks gold prices, PowerShares DB Base MetalsDBB, which hugs the value of industrial metals, and the PowerShares DB Agriculture FundDBA, which tries to match price moves in farm products such as sugar, corn and wheat.

For an "average" investor, Roe recommends an investment of 3%-10% commodities, which will help reduce overall volatility of a portfolio . And since volatility is how most money managers identify risk, lower overall volatility means less risk.

Recommended Reading

Those investors still hell bent on trading commodities futures (despite the warnings) might want to take a look at Opportunity and Risk: An Educational Guide to Trading Futures and Options on Futures, by the National Futures Association, an industry self-regulatory body. Readers can download a PDF file free from the organization's Web site.