Commodity Trading and the Future of Commodity Markets
commodity trading

The trading of different commodities around the world takes place in a regulated commodity exchange. The producers and buyers work under a common umbrella of trading regulations and standard contract rules. Commodity exchange allows for trading of commodities such as crude oil, wheat, copper, platinum, orange juice among other raw products. Crude oil and coffee are among most of the things that have been traded for a long time. However, new markets are n the rise especially in the 21st century.

Carbon trading is one the most growing market considering the significant concerns about the environment and climate changes caused by greenhouse gasses. The emissions permit markets are likely to be on the rise in the future which might even have further development emissions, water, and even plastic which will come with a price to the environment.

Commodity trading consists of selling and buying of futures contracts for a broad range of assets. Cocoa and nickel producers use future contracts for their future sales while commercial users use the future contracts to hedge against price spikes in the market. However, these actors are dwarfed in the commodity market by the endless activities f traders and speculators trying to accrue profits.

A futures contract is a representation of a future price either buying or selling a particular commodity whose price is determined by the demand and supply at the time of contract. Due to the difference in time zones across the globe, some active traders are making use of advanced technology in the electronic trading platforms. Electronically traded futures have been on the rise as different exchanges have come together to make a super commodity exchange.

Some traders focus on a particular area of the commodities market while others tend to look deep into price action. There is the likelihood of continued commodity market growth with the emergence of the market in countries like Russia, India, Brazil and China. Commodity market has high chances of seeing through economic shocks as the world relies on essential commodities such as sugar, wheat, and coffee, crude oil, gold, silver, copper and steel among other raw materials.


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