Commodities

Commodities The financial term commodity is defined as a physical substance, such as food, grains, a and metals, which is interchangeable with other product of the same type, and which investors buy or sell, usually through future contracts. Or more generally, a product which trades on a commodity exchange; this would also include foreign currencies and financial instruments and indexes. When one speaks of a commodity, they can be referring to two types of this aspect of finance. A cash commodity or an actual is an actual physical commodity which is delivered at the completion of a "contract" This is the lesser utilized of commodities.(Investors Glossary) The more predominant type of commodity that is used is the commodity futures contract. The futures markets are described as continuous auction markets and exchanges providing the latest information about supply and demand with respect to individual commodities, financial instruments, and currencies. Futures exchanges are where buyers and sellers of an expanding list of commodities, financial instruments, and currencies, come together to trade.(Investors Glossary) The primary purpose of futures markets, is to provide an efficient and effective mechanism to manage price risk. The futures market allows buyers futures, price, contract, group, commodities, type, commodity, includes, months, market, needs, currencies, new, corn, agricultural, trade, per, different, continuously, bushel, month, meet, make, instruments, institutional, growing, foreign, financial, exchange, every, corporate, contracts, available, appears, almost, three, same, markets, crops, cash, buyers, buy, types, treasury, trading, traded, supplier, stock, something