| commodities exchange | |
noun | |
| an exchange for buying and selling commodities for future delivery [syn: commodity exchange] |
Commodities Exchange
An entity, usually an incorporated non-profit association, that determines and enforces rules and procedures for the trading of commodities and related investments, such as commodity futures. Commodities exchange also refers to the physical center where trading takes place.
Investopedia Commentary
Modern commodity markets began with the trading of agricultural products, such as corn, cattle, wheat and pigs in the 19th century. Modern commodity markets trade many types of investment vehicles, and are often utilized by various investors from commodity producers to investment speculators.
For example, a corn producer could purchase corn futures on a commodity exchange to lock in a price for a sale of a specified amount of corn at a future date, while at the same time a speculator could buy and sell corn futures with the hope of profiting from future changes in corn prices.
Related Links
Futures Fundamentals
What Is Wrong With Gold?
Commodities: The Portfolio Hedge
A Beginner's Guide To Hedging
See also: Cash Commodity, Commodity, Commodity Futures Contract, Exchange, Hedge
Also spelled: Commodity Exchange
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