A commodity is the generic term for a contract-bound tradable item. Commodities are typically raw materials. Commodities are also known as Futures, as the contract entitles the buyer to item at a date in the future.
Generally, these are basic resources and agricultural products such as iron ore, crude oil, coal, salt, sugar, coffee beans, soybeans, aluminum, copper, rice, wheat, gold, silver, palladium, and platinum. Soft commodities are goods that are grown, while hard commodities are the ones that are extracted through mining.
Commodities are traded on exchanges as contracts for the delivery of goods.
Commodity contracts are traded on exchanges. Commodities exchanges include:
- Chicago Board of Trade (CBOT)
- Chicago Mercantile Exchange (CME)
- Dalian Commodity Exchange (DCE)
- Global Board of Trade (GBOT)
- Euronext.liffe (LIFFE)
- Kansas City Board of Trade (KCBT)
- Kuala Lumpur Futures Exchange (KLSE)
- London Metal Exchange (LME)
- New York Mercantile Exchange (NYMEX)
- National Commodity Exchange Limited (NCEL)
- Multi Commodity Exchange (MCX)
- International Indonesian Forex Change Market (IIFCM)
- Marché à Terme International de France (MATIF)