What can be traded in a Commodities Market?
A Commodities Market is a market where raw materials or primary products
are traded. These raw materials or primary products can be traded in different
forms, such as spot (immediate) or futures (delivery at a later date) contracts.
Some examples of commodities that can be traded in a commodities market
include agricultural products (corn, soybeans, wheat, etc.), energy products
(crude oil, natural gas, gasoline, etc.), metals (gold, silver, platinum, etc.) and
livestock (cattle, hogs, etc.).
Trading in the commodities market is necessary as it allows different entities
like farmers, manufacturers, investors, and governments to manage their risks
and hedge against price fluctuations. It also provides an essential platform for
the price discovery of these raw materials, which influences the value of the
end product in the market.
Commodities trading is a significant business worldwide, with several
exchanges operating at local and global levels, such as the Chicago
Mercantile Exchange, London Metal Exchange, and New York Mercantile
Exchange.
References:
- Commodities Trading - What You Need To Know
(https://www.investopedia.com/university/commodities/commodities8.asp )
- Trading commodities: A beginner's guide (https://www.ft.com/content/bee36f4c-2d50-11e79555-23ef563ecf9a )
- The Basics of Commodities Trading (https://www.thebalance.com/the-basics-ofcommodities-trading-809356 )