Speaking of commodities in general, there are resons why commodities can be less risky than stocks.
1) information on a single compnay can be falsified alot easier than information on a commodity. All it takes is a couple unscrupulous guys on the board to publish misleading/false financial results. Trying to falsify data on a commodity would generally imply a very large scale plot... and the guys issuing data on commodities are a hell of alot more neutral than the directors of company issuing its company's information.
2) A company can go bankrupt and its stock can fall to zero. Have you ever seen a commodity fall to zero ? No, it can't happen because a commodity will never be free as a price of zero would imply.
3) If you are thinking of leverage and its danger, one can use as litle leverage as one wants depending on the size of their account. If you have more capital in the acount than the notional size of the contract, you are not leveraged.
4) Consumable commodities tend to be alot more simple to analyse than stocks from a findamental point of view. A consumable commodity has a productions cost, storage cost, a certain quanity of supply, and a certain quantity of demand. Also, consumable commodities are actualy needed by people. Stocks, on the other hand, are far more difficult to price as there are so many more factors to consider (earnings, debt, competition, dividends, book value, cash flow ...etc). This leads to very different techniques of analysing stocks and quite likely partially explains the wild price swings in stocks (stocks can be far more volatile than even nat gas). Also, stocks can be dumped in a day as nobody actualy needs stocks. You can do fine for a few months without stocks in your portfolio, can people cary on normaly without commodities ?
Don't get me wrong, I own some stocks myself, but I am alot more confident in making money in commodities than in stocks.
