Commodity market
A market where raw materials and primary products are bought and sold, either for prompt delivery or through contracts for future delivery.
Spot market: A market where goods or financial instruments are exchanged for near-immediate delivery and payment. It contrasts with futures trading by arranging prompt exchange of the commodity.
Agricultural commodity: A crop or livestock product traded as a standardized good, such as wheat, soybeans, or cattle. Agricultural products form a major group of commodities traded in these markets.
Forward contract: A privately negotiated agreement to buy or sell an asset at a set price on a future date. Forwards offer more customization than the standardized futures contracts common in exchanges.
Commodity price volatility: The degree to which commodity prices fluctuate over time. Supply shocks, demand changes, and trading can produce sharp price movements.
Futures contract: A standardized agreement to buy or sell an asset at a set price on a specified future date. Commodity futures let producers and buyers set prices before delivery.
Energy commodity: A fuel or energy-related raw material traded in markets, including crude oil, natural gas, and coal. Energy trading links commodity prices to fuel production and consumption.
Options contract: A contract giving its holder the right, but not the obligation, to buy or sell an asset at a specified price. Options provide conditional exposure to commodity prices rather than requiring a future trade.
Contango: A futures-market condition in which futures prices exceed the current spot price. The shape of commodity futures prices affects storage incentives and investment returns.
Commodity exchange: An organized marketplace that lists standardized contracts and supports trading under established rules. Exchanges provide the rules and infrastructure for many commodity contracts.
Metal commodity: A metal traded as a raw material, including copper, aluminum, gold, or silver. Metal markets price inputs used in manufacturing, construction, and investment.