An introduction to commodity
A commodity is a basic physical asset, often used as a raw material in the production of goods or services.
To be traded on the markets, a commodity must be interchangeable with another commodity of the same type and grade. That means that to a trader, gold is gold: no matter where it was mined, or which company mined it. The term for this quality in commodities is fungible.
Some of the most commonly traded commodities incude:
GOLD, OIL, WHEAT, NATURAL GAS, BEEF
they are split into two varieties. are metals or energy resources, mined or extracted from natural resources. Soft commodities are agricalutureal, farmed or grown. Soft commodities end to e seasonal, and prone to spoilage.
The buying and selling of commodities for profit is known as commodities trading. Commodities trading is split into twon types, the spot market and the futures market, the spot market is used for connoditiest that will be delivered immediately, and the futures market is for commodities that will be delivered at some point in the future.
Most commoditiest traders are speculators and do not wish to take delivery of the connodities they are trading, so most futures contracts are closed before their delivery date. futures contracts are traded on futures exchanges, with most commondities being associated with a specific local exchange.