What is Commodity – Troubleinthepeace

What is a Commodity Market? Types of commodity markets


A Commodity Market is a physical or virtual market for buying, selling and trading in crude products such as oil, gold or coffee.

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Commodity market

Commodity Market in English is Commodity Market.

Commodity marketis a physical or virtual marketplace for the buying, selling and trading of raw or primary products. Currently, there are about 50 in the worldCommodity marketfacilitated the trade of about 100 major commodities.


Commodities are divided into two categories: hard goods and soft goods. Hard commodities are usually natural resources that must be dug or mined such as gold, rubber, and oil, while soft commodities are agricultural or livestock products such as corn, wheat, coffee, sugar, and soybeans. and pork.

How commodity markets work

People can invest in commodities in many ways. Investors can buy shares in corporations whose businesses depend on commodity prices, or buy mutual funds, index funds, or ETFs that focus on commodity-related companies.


The most direct way to invest in commodities is to buy and sell futures contracts. A futures contract obliges the holder to buy or sell a commodity at a predetermined price on a future delivery date.

Types of commodity markets

Major U.S. commodity exchanges are located in Chicago and New York, with several exchanges in other locations within the United States. The Chicago Board of Trade (CBOT) was established in Chicago in 1848.

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Commodities traded on CBOT include corn, gold, silver, soybeans, wheat, oats, rice, and ethanol. The Chicago Mercantile Exchange (CME) trades commodities such as milk, butter, cattle for fattening, cattle, pork, lean pigs and timber.


The London Metal Exchange and the Tokyo Commodity Exchange are prominent international commodity exchanges.

Commodities are mainly traded electronically; however, some US exchanges still use the auction method. Commodity trading that is done outside of the operations of exchanges is known as a decentralized exchange market.

Requirements for commodity markets

In the US, the Commodity Futures Trading Commission (CFTC) controlsCommodity marketfutures and options markets. The CFTC’s goal is to promote competitive, efficient, and transparent markets that help protect consumers from fraud, manipulation, and unscrupulous practices.

The regulation ofCommodity marketcontinued to be in the spotlight after four leading investment banks were caught up in a precious metals manipulation investigation in 2014.

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(According toinvestopedia)


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