Commodity Market is that part of market in which investors or individuals trade and take commodity tips in economic sector. There are two two types of commodities Hard and Soft Hard commodities such as Gold , Silver, Copper , Aluminium , Nickel etc and Soft commodities such as soybean, wheat, coffee, cocoa etc. About fifty major commodity markets worldwide have purely financial transactions oldest way of investing in commodities is Futures contracts which are secured by physical assets commodity Index Fund is the whose assets are invested index is called commodity index fund in every case the index fund is commodity future index. Then cash commodity refers to physical goods like wheat cotten sugar soyabean etc which can be converted into cash or those commodities which are buyed, sold or traded.
Some of the major Commodity exchanges are Chicago Board of Trade (cbot) Gold,Silver, soybeans, wheat, oats, rice and ethanol then another one is New york board of trade where trading of commodities like coffee orange juice ethanol stc. These commodities are traded electronically in this market.
Some of the common terms related to Commodity market are commodity paper is a loan paper which involves raw materials owned by the borrower. Another type of commodity are exchange traded commodities which were introduced in 2003 this term is used for exchange traded notes and exchange traded funds these provide exposure to many more commodities and indices.
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