Commodity Market?

A commodity market is a physical or virtual marketplace for buying, selling, and trading raw or primary products. Trading can be carried out over the counter or through commodity exchange.

Example of 5 tops Global Commodity Exchange and their links.
  1. Chicago Mercantile Exchange (CME
  2. London Metal Exchange (LME)
  3. Multi Commodity Exchange(MCX)
  4. New York Mercantile Exchange (NYMEX)
  5. Tokyo Commodity Exchange (TOCOM)

A commodity market is a market that trades in the primary economic sector rather than manufactured products, such as cocoa, fruit and sugar. Hard commodities are mined, such as gold and oil. Futures contracts are the oldest way of investing in commodities. Futures are secured by physical assets.Commodity markets can include physical trading and derivatives trading using spot prices, forwards, futures, and options on futures. Farmers have used a simple form of derivative trading in the commodity market for centuries for price risk management.

Key Takeaways
  1. A commodity market involves buying, selling, or trading a raw product, such as oil, gold, or coffee.
  2. There are hard commodities, which are generally natural resources, and soft commodities, which are livestock or agricultural goods.
  3. Investors can gain exposure to commodities by investing in companies that have exposure to commodities or investing in commodities directly via futures contracts.
  4. The major U.S. commodity exchanges are the Chicago Board of Trade, the Chicago Mercantile Exchange, the New York Board of Trade, and the New York Mercantile Exchange.

A commodity market is a physical or virtual marketplace for buying, selling, and trading raw or primary products. There are currently about 50 major commodity markets worldwide that facilitate trade in approximately 100 primary commodities.