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It's not.
This sounds kinda weird, doesn't it? After all, there's a huge building in Chicago with "Chicago Mercantile Exchange" written on the sign out front where food commodities are traded, but they don't actually trade food.
What is traded, when food traders gather to do what they do, is derivatives (specifically, futures, forwards and options) with foodstuffs underlying. If you go to CME and buy a Rough Rice Futures Contract, you are agreeing to purchase five truckloads of rough rice (unmilled rice) on a certain date for a certain price. Or if you buy an option on rough rice, you're allowed but not required to buy those five truckloads of rice on that date for that price.
Cedrick Olson
Wiki User
∙ 12y agoIt's not.
This sounds kinda weird, doesn't it? After all, there's a huge building in Chicago with "Chicago Mercantile Exchange" written on the sign out front where food commodities are traded, but they don't actually trade food.
What is traded, when food traders gather to do what they do, is derivatives (specifically, futures, forwards and options) with foodstuffs underlying. If you go to CME and buy a Rough Rice Futures Contract, you are agreeing to purchase five truckloads of rough rice (unmilled rice) on a certain date for a certain price. Or if you buy an option on rough rice, you're allowed but not required to buy those five truckloads of rice on that date for that price.
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What is the most expensive commodity traded?
PLATINUM
Why is gold traded on the commodities market?
Because it is a commodity.
What is the world's most traded commodity?
coffe is said to be worlds most traded commodidtes
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.
What is commodity investment?
Commodity investment is investing in a special type of market called the commodities market. This market is where raw materials like food, metals, and electricity are traded. This is a risky market to invest in, so buyer beware.
What does commodity gold mean?
Gold is a commodity that can be sold and traded, just like any other commodity. Gold is considered a hard commodity because it is extracted from mining, instead of being grown.
What is pork commodity?
Just Pork., Dead carcas of Pig ! Traded in commodity markets. a.k.a Bacon, Lard etc
Which is the most traded commodity in the world?
1. Water2. Oil3. Coffee
Can I buy and sell crude oil like stocks?
Yes. That is called Commodity trading. Oil is a commodity and is traded in the commodities market.
Does anyone buy geodes?
Although geodes are not traded as a commodity is traded, dealers and collectors are interested in purchasing good specimens.
What was the primary commodity traded by French traders in colonial North America?
Fur....
What does the term commodity means?
The term "commodities trading" basically means that things are being traded instead of stocks. The things that are often traded are in goods, like food. Typically, as supply goes down, demand goes up, and so does price.
