Commodity Trading Stories: Seasonal Demand and Disaster-Profit Claims
A sales pitch can make a trade sound obvious by pointing to winter demand, a drought, or damage from a natural disaster. Publicly known information, however, is not a private advantage, and a correct story about supply or demand does not guarantee a profitable contract price. This guide explains two recurring commodity-promotion tactics identified by the CFTC. It helps readers question the jump from a familiar event to a promised investment return.
Adapted from public-domain educational material published by CFTC. Fynoptic has organized and edited the material and added introductory and practical guidance. Sources were reviewed on October 28, 2026; original publication dates, where available, are listed below.
Profits Based on Seasonal Demand or Other Well-Known Public Information
Beware of promises of easy profits from commodity futures and options based on seasonal demand and other well-known public information.
The CFTC urges you to be alert to possible fraudulent claims that you can profit on commodity futures or options trading as a result of changes in the prices of physical commodities based on seasonal weather patterns or other well-known events.
For example, it is well known that the prices of energy commodities, such as heating oil, natural gas, and gasoline, fluctuate in response to changes in the seasons. These normal fluctuations, however, are well known by traders in the futures and options markets and already reflected in their prices.
Investing in futures and options markets is not like investing in the physical commodity itself. Just because the price you pay for heating oil or natural gas is rising does not mean that the price of heating oil or natural gas futures and options prices will also rise! As a result, there is little if any possibility to profit in these markets based on such information.
When salespeople call you claiming to be able to profit from predicted price movements based on well-publicized events such as political unrest, published reports, weather events, and market disruptions, their claims are most likely fraudulent. Futures and options markets adjust very quickly to news events and announcements, and by the time salespeople come calling, the opportunity to profit from such news is gone. In addition, beware of claims that the risk of loss can be limited; in fact, because futures contracts are “leveraged” or “margined,” futures investors can lose more, and sometimes substantially more, than their initial deposit.
The CFTC urges members of the public to report any suspicious claims about energy commodity sales pitches based on seasonal demand patterns or other well-known events by calling our toll-free line at 866-FON-CFTC (800-366-2382) or by emailing us at [email protected].
The Sales Pitch
The solicitation of commodity futures and options occurs in all media, including radio, television, print advertisements, Internet promotions, and spam email.
You might also receive a “cold call” from a commodity broker who obtained your name from a list. Brokers often make repeated phone calls to people and aggressively urge them to open an account and send in money immediately to take advantage of a particular trend or event in the market.
If you see such solicitations or receive such a call, be alert and careful if the following types of representations are made:
- It won’t be long before cold weather is here. Heating oil (or natural gas) inventories are down and demand is going up!
- You can turn $5,000 into $20,000 or more with just a ten cent move in prices!
- The situation in the Middle East has disrupted global oil supplies, and so prices are bound to rise!
- We can protect your investment to limit any losses!
- You need to act quickly to seize this “can’t miss” opportunity!
- You can’t lose money trading options!
These pitches are all fraudulent because, in one way or another, they make unjustified profit claims or improperly minimize risk.
False Promises of Profits as a Result of Natural Disasters
Beware of claims that the damage caused by natural disasters will increase the profitability of trading commodity futures or options.
Natural disasters cause extensive damage to various regions of the country throughout the year. In addition to causing great hardship among residents of those regions, the events cause damage to factories, oil drilling stations, and crops.
Please be advised that whatever effect these events might have on the price of physical commodities, the occurrence of such well-known events do not necessarily increase the likelihood of making profits in commodity futures or options trades that are based on these products or limit the risk in such trades. Any claims of potential profits from trading in futures or options on affected products or commodities based on the effects of the natural disaster are probably fraudulent.
The Sales Pitch
Commodity brokerage firms and brokers often use telephone calls and email, along with Internet, television or radio ads, to interest members of the public in trading commodity futures and options. Federal commodities laws prohibit these brokers from overstating the profitability of futures trading, understating risks, and falsifying performance history.
Some brokers violate this prohibition by claiming that customers can profit based upon well-known events, such as seasonal changes in climate, natural disasters, or global conflict. Such pitches are misleading because they are meant to suggest that the broker has special information that gives him or her an edge in executing a customer’s trades. That is false. It is true that increases in demand or limitations in supply of a particular commodity might affect the commodity’s price. However, when such changes are already known or anticipated by the market, they will not necessarily affect the value of a futures or option position on those commodities. This is because traders in the markets have already factored this information into the price.
In addition, claims that the risk of purchasing commodity futures and options can be predetermined or fixed are misleading. Purchasers of commodity futures or options contracts can lose every penny given to a broker, and, because futures contracts are “leveraged” or “margined,” customers may be liable for losses in excess of their initial deposits.
Bottom Line
Any claims of potential profits from trading in futures or options on affected products or commodities based on the effects of the natural disaster are probably fraudulent.
If you have questions, are aware of suspicious activities, or believe you have been defrauded, submit a tip or complaint to the CFTC.
Putting this into practice
Ask what information the market already reflects and what costs or leverage the proposed trade adds. Identify the exact contract and the loss scenario, not just the event described in the pitch. Urgency based on a headline does not remove the need to verify the seller and the investment terms.