Commodity market
Commodities or raw materials are basic goods used in productive and commercial activities. Their markets connect producers, consumers, and participants seeking to manage exposure to price changes.
How it works at a general level
They may be traded through spot transactions, futures contracts, or other derivative instruments. In contracts with expiration, the price may also reflect storage and transportation costs and expectations for supply and demand.
Examples of instruments or segments
Energy, such as oil and natural gas.
Industrial and precious metals.
Agricultural products and other basic goods.
General characteristics
- Direct relationship with supply chains and physical demand.
- Seasonality relevant to certain products.
- Differences between spot prices and contracts with expiration.
Factors that commonly influence
- Production, inventories, consumption, and logistics capacity.
- Weather, geopolitics, and decisions by major producers.
- Economic activity, exchange rates, and transportation costs.
General risks
- Abrupt changes in supply or demand can increase volatility.
- Contracts with expiration include rollover and price risks.
- Weather, political, or logistical events can alter the market.
Important: This information is educational and general. It does not constitute financial advice or an investment recommendation. The examples describe types of instruments or segments and do not confirm their availability at TRD Station.