What are Commodities Trading?

What are Commodities Trading?

To answer this question, we first need to know what Commodities are:

Commodities are products that function as raw materials, produced in scale and that can be stocked without loss of quality, such as oil, frozen orange juice, oxen, coffee, soybeans and gold. Commodity comes from English and has originally meant merchandise.

In this way, its price is determined by the world market as a consequence of supply and demand, and not by the company that produces it, since its "brand" does not matter as much.

In general terms, some characteristics that determine a commodity are:
  • Primary products;
  • Great worldwide importance;
  • Small degree of industrialization;
  • Large-scale production;
  • Global marketing;
  • Quality and uniform characteristics of production without brand differentiation;
  • They can be stored without loss of quality.

What are Commodities Trading?

Gold wheat commodities are the basic elements of the global economy. The natural resources traded on dedicated exchanges around the world are of two types, which are typically agricultural, such as rice or sugar, and hardwood, metals or energies like silver and gas. Commodity production and consumption depends on many factors, including supply and demand, whether economic and political events and the dollar as commodities are normally priced in the US currency, which means that commodity prices may fluctuate significantly. Markets specializing in specific markets, for example nymex in new york life in London or SA chemi in Shanghai, are generally traded as futures contracts which are simply agreements to exchange an asset at an agreed price and so far in the future, which allows you to negotiate your own contracts without ever having to own the underlying asset but remember how bad debt prices can be very volatile, so it is vital to keep an eye out for the potential downside when.
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Gold wheat commodities are the basic elements of the global economy. The natural resources traded on dedicated exchanges around the world are of two types, which are typically agricultural, such as rice or sugar, and hardwood, metals or energies like silver and gas. Commodity production and consumption depends on many factors, including supply and demand, whether economic and political events and the dollar as commodities are normally priced in the US currency, which means that commodity prices may fluctuate significantly. Markets specializing in specific markets, for example nymex in new york life in London or SA chemi in Shanghai, are generally traded as futures contracts which are simply agreements to exchange an asset at an agreed price and so far in the future, which allows you to negotiate your own contracts without ever having to own the underlying asset but remember how bad debt prices can be very volatile, so it is vital to keep an eye out for the potential downside when.

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