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How to Trade Commodities?

Updated: 9/27/2023
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What is a Commodity?

Commodities are actually physical items that can be handled, stored, and moved about. These are goods for which there is a commercial demand. Commodities include such items as corn, gold, and crude oil. They can be purchased and sold for immediate delivery, known as "spot" delivery, or promised by contract for future delivery. It is these contracts for future delivery that form the basis of the commodities trading market.

What is a Future?

In fact, what is traded in commodities trading markets is what are called futures or futures contracts. These have essentially the same features and effect as the forward delivery contract referred to above, but they are the embodiment of the exchange involved in commodities trading. These are traded in the commodities market through futures exchanges.

Futures contracts serve an important and valuable purpose for purchasers of goods for use in production. A large commercial baker needing a bulk quantity of wheat at a certain time in the future wants to be sure of its availability. To ensure that availability, the maker can enter into a contract for its future delivery with a supplier. Price, quantity, and delivery are guaranteed by the contract, and the purchaser will pay contract price to complete the purchase.

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Related questions

How do you trade commodities?

You can trade commodities online, all you need is an Internet connection and to choose commodities trading platform. see the related links below.


What is the safest way to trade commodities?

The safest way to trade commodities is through a broker. He/she will have a better idea of what is safest.


Where can I find instructions on how to trade commodities?

You can learn how to trade commodities on the following website: http://commodities.about.com/od/researchcommodities/u/commodities-trading-path.htm. They have useful info.


What sites allow you to trade commodities?

There are some sites that allow one to trade commodities such as Plus500, ClearTrade, Barclays Stockbrokers and also CME Group are just a few sites that one could trade commodities on.


Where can I find trade commodities forex?

To find trade commodities forex go to www.forex.com a website dedicated to showing newcomers how to trade commodities. It is user friendly and easy to learn using their sample training program.


How to trade commodities online securely?

If one wants to trade commodities online securely, do as much research as possible and look first to reputable firms such as clear trade commodities. Also, talk to as many people as possible who trade on a regular basis.


Why did some Greek settlements trade?

To exchange their surplus commodities for other commodities they needed. To make a financial profit from trading commodities and services.


What is an Exchange of commodities for money or other commodities?

just that; an exchange. Maybe a sale? its called a trade


Why did some ancient Greek settlements trade?

To exchange their surplus commodities for other commodities they needed. To make a financial profit from trading commodities and services.


The exchange of commodities between two countries is refferd as?

Bilateral trade


What commodities would be good to trade in the future?

"Commodities that good to trade in the future will be ones that will still be high in demand, whether or not the supply will be able to meet that demand. For example, oil will be a good commodity to trade in the future."


Where can you find companies that trade commodities?

One can find companies that trade commodities by reading a copy of the Financial Times or looking on the website. One can also find details of such companies on Market Watch.