what are commodity exchanges?

Answer 1

Hi Harshad,

A commodity exchange is a place where commodities and derivatives are traded - for e.g. agricultural products like wheat, sugar etc. are traded. These exchanges also trade on future contracts for products. For e.g., if I am a farmer manufacturing wheat, I can sell a future contract on 100 kgs. of rice at 100 Rs./kg to be delivered 3 months from now.

Here's a couple of very good links to read in detail about commodity exchanges:

http://www.rediff.com/money/2005/may/05perfin.htm
http://en.wikipedia.org/wiki/Commodities_exchanges

Answer 2

Open and organized marketplace where ownership titles to standardized quantities or volumes of certain commodities are traded by its members. Although samples of the commodities are physically examined and graded, physical delivery of the commodity rarely occurs because the delivery contracts are usually exchanged or closed out before their expiration date. Commodity exchanges are divided roughly into three main types: metals exchanges, fuels exchanges, and soft (agricultural) commodity exchanges. Other exchanges deal in currencies and commodity indices. Also called commodity futures market or commodity market.

Answer 3

A commodities exchange is an exchange where various commodities and derivatives products are traded. Most commodity markets across the world trade in agricultural products and other raw materials (like wheat, barley, sugar, maize, cotton, cocoa, coffee, milk products, pork bellies, oil, metals, etc.) and contracts based on them. These contracts can include spot prices, forwards, futures and options on futures. Other sophisticated products may include interest rates, environmental instruments, swaps, or ocean freight contracts.

Answer 4

That's the equivalent of a stock market for "commodities" usually stuff like oil, wood, grain, whatever. They trade "Futures" which are future delivery contracts that usually promise delivery in 3-4 months. So basically when you buy 1mln oil futures (let's assume 1 barrel=1 future) if you don't sell it within the period when you buy and the delivery time, they're going to show up with a million barrels of oil at your house.

Answer 5

Commodity Exchange is like place where you can buy and sell commodites like gold,silver ,pulses, copper , oil on share like trading . www.mcxindia.com

Answer 6

surely it is not a barter system. it is something very complex to define.

Answer 7

visit mcxindia & ncdexindia site

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Answer 8

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