What is commodities trading?

Question

What is commodities trading?

Answer 1

Commodities are raw materials (e.g., mined or farmed) or basic products (e.g., energy) where the quality is fixed (so no competition on quality).  Often the price is fixed by the financial markets as well, so you get a global price (e.g., gold price, oil price).

Commodities trading means buying commodities when you think they are cheap in the hope of selling them when they become expensive.

Answer 2

Traders take risks on the market values of commodities such as pork bellies and orange juice.

See the film Trading Places.  It explains it very well.

Answer 3

A commodity is something rare and valuable...like black-market valuable. O_O