What is commodity trading?
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A company is dealing with properties and lands. Other business are commodity trading . what is that?
In this sense a commodity is a physical usable, good that can be traded and moved. They are often time viewed as "raw materials" (but not always)
Examples of commodities are oil, natural gas, gold, wheat, etc.
If companies are trading in commodities, they are buying and selling the commodities to earn a profit or secure a price, as well as unload or obtain the actual item.
For example, a wheat farmer may sell his grain on the commodities market in order to earn money for his product. While at the same time a very large bakery may need to buy wheat in order to make bread.
The bakery will go to the commodities market and buy certain quantities of bread based on its current trading price.
These are the basic events that involve trading commodities in order to transact the actual good needed.
It can get a lot more complicate when companies try to lock in prices. It gets even more complicatedwhen companies are using the commodities market as an investment, hedging or speculating tool (and not actually trying to obtain or sell goods)
2 Responses to “What is commodity trading?”
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March 3rd, 2010 at 7:20 pm
In this sense a commodity is a physical usable, good that can be traded and moved. They are often time viewed as "raw materials" (but not always)
Examples of commodities are oil, natural gas, gold, wheat, etc.
If companies are trading in commodities, they are buying and selling the commodities to earn a profit or secure a price, as well as unload or obtain the actual item.
For example, a wheat farmer may sell his grain on the commodities market in order to earn money for his product. While at the same time a very large bakery may need to buy wheat in order to make bread.
The bakery will go to the commodities market and buy certain quantities of bread based on its current trading price.
These are the basic events that involve trading commodities in order to transact the actual good needed.
It can get a lot more complicate when companies try to lock in prices. It gets even more complicatedwhen companies are using the commodities market as an investment, hedging or speculating tool (and not actually trying to obtain or sell goods)
References :
March 3rd, 2010 at 7:52 pm
Acompany deals with business such as real estitates that is company’s wish, if it is doing commodites trading that is a part of other business. Nothing makes difference, real estate is differ from comodity trading. If you wanna join NSE BSE trading or commodity trading or TIN TAN PAN facilitation center visit.
http://www.karvy.com/v2/fortune/forums/
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