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Why does a commodity futures market exist within the broader commodities market?
Wiki User
∙ 7y ago
The commodity futures market was invented to stabilize the market for consumers of bulk commodities. If you make breakfast cereal and you use a million bushels of wheat a year, it's nice to know you can get the wheat you need and nicer to know what it will cost. Futures eliminate uncertainty.
Wiki User
∙ 7y ago
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Why a commodity futures market exists within the broader commodities market?
The commodity futures market was invented to stabilize the market for consumers of bulk commodities. If you make breakfast cereal and you use a million bushels of wheat a year, it's nice to know you can get the wheat you need and nicer to know what it will cost. Futures eliminate uncertainty.
Which accurately explains the difference between the stock market and the commodity market?
ownership in companies is traded in the stock market while ownership of raw, unprocessed goods is traded in the commodity market. APEX
What are commodities futures options used for?
Grain farmers use commodities futures options for getting their products on the market. Without commodities futures options, farmers would have a tough time selling their products.
Why is gold traded on the commodities market?
Because it is a commodity.
A commodity futures market exists within the boarder commodities market for which reasons?
Finding prices: Buyers and sellers can trade standardized contracts for commodities at a later date on the futures market. This works with cost disclosure as market members altogether decide the fair worth of the item founded on market interest elements. Management of risk: Commodity producers and consumers can hedge against price volatility through futures contracts. Market participants are able to manage their risk exposure and protect themselves from adverse price movements by locking in a future price through futures contracts. Investment and speculation: Speculators and investors who seek to profit from commodity price fluctuations without actually owning or delivering the underlying asset are drawn to the futures market. Market liquidity is improved, and opportunities for capital appreciation are created as a result. Possibilities of arbitrage: Arbitrage opportunities are made possible by the futures market. By buying low in one market and selling high in the other, traders can take advantage of price differences between the spot market, which is the current market price, and the futures market. a more efficient market: By allowing market participants to make informed decisions based on available price and market information, the futures market makes efficient resource allocation easier. It makes it possible for efficient price formation and overall market stability by providing a platform for trading commodities that is both transparent and regulated.
Why a commodity futures market exists within the broader commodities market?
The commodity futures market was invented to stabilize the market for consumers of bulk commodities. If you make breakfast cereal and you use a million bushels of wheat a year, it's nice to know you can get the wheat you need and nicer to know what it will cost. Futures eliminate uncertainty.
Who Regulates commodity exchanges and trading in agricultural metal and other commodities?
CFTC... Commodities Futures Trading Commission
How much is gold trading for on the stock market?
A commodity such as gold does not trade on the "stock" market. Gold and other commodities trade on the futures market. Currently it is trading as much as $1798.40.
What has the author George Angell written?
George Angell has written: 'Winning in the futures market' -- subject(s): Futures market, Financial futures, Commodity exchanges 'Small stocks for big profits' -- subject(s): Stocks, Small capitalization stocks, Finance.,, Small business 'Winning in the futures market : a money-making guide to trading hedging and speculating' -- subject(s): Futures market, Financial futures, Speculation, Commodity exchanges 'Winning in the commodities market' -- subject(s): Commodity futures 'Real-time proven commodity spreads' -- subject(s): Commodity exchanges, Charts, diagrams 'Agricultural options' -- subject(s): Options (Finance), Cattle trade, Grain trade
What is the difference between commodities and stocks or the difference between commodities and futures?
Commodities are things - stores of value, like gold, wheat, soybeans, cocoa, cotton, oil, etc. Futures are contracts for the future delivery of something - could be a commodity, stock index, foreign currency, bond, etc.
Which accurately explains the difference between the stock market and the commodity market?
ownership in companies is traded in the stock market while ownership of raw, unprocessed goods is traded in the commodity market. APEX
What are commodities futures options used for?
Grain farmers use commodities futures options for getting their products on the market. Without commodities futures options, farmers would have a tough time selling their products.
What type of company is the Commodity Futures market?
there are two types that are part of the commodity futures market. A normal futures market is one where the price of the nearby contract is less than the price of the distant futures contract. The other is an inverted futures market, the price of the near contract is greater then the price of the distant contract.
What type of market is the commodity market?
there are two types that are part of the commodity futures market. A normal futures market is one where the price of the nearby contract is less than the price of the distant futures contract. The other is an inverted futures market, the price of the near contract is greater then the price of the distant contract.
Why is gold traded on the commodities market?
Because it is a commodity.
A commodity futures market exists within the boarder commodities market for which reasons?
Finding prices: Buyers and sellers can trade standardized contracts for commodities at a later date on the futures market. This works with cost disclosure as market members altogether decide the fair worth of the item founded on market interest elements. Management of risk: Commodity producers and consumers can hedge against price volatility through futures contracts. Market participants are able to manage their risk exposure and protect themselves from adverse price movements by locking in a future price through futures contracts. Investment and speculation: Speculators and investors who seek to profit from commodity price fluctuations without actually owning or delivering the underlying asset are drawn to the futures market. Market liquidity is improved, and opportunities for capital appreciation are created as a result. Possibilities of arbitrage: Arbitrage opportunities are made possible by the futures market. By buying low in one market and selling high in the other, traders can take advantage of price differences between the spot market, which is the current market price, and the futures market. a more efficient market: By allowing market participants to make informed decisions based on available price and market information, the futures market makes efficient resource allocation easier. It makes it possible for efficient price formation and overall market stability by providing a platform for trading commodities that is both transparent and regulated.
What has the author Philip McBride Johnson written?
Philip McBride Johnson has written: 'Special release on the Futures Trading Practices Act of 1992' 'Commodities Regulations/With Supplements (3 Volumes and 2 Supplements)' 'Futures markets' -- subject(s): Futures market, Commodity exchanges
