What is a Commodity Market? List of Top US Commodity Exchange’s
A commodity market is a place where buyers and sellers meet together to buy and sell a commodity or in simple words a virtual or physical market place where buyers and sellers do trade for earning profit. The popular US commodities are Gold, Silver, Crude Oil, Platinum, Natural Gas, Heating Oil, Copper, Lead, Zink, etc. Furthermore there are some other popular soft commodities those are Wheat, Sugar, Coffee, Cocoa, Milk etc.
Commodity market has its own trading rules and regulations and it is much differ from the other financial markets like stock trading, forex trading, etc.The hard commodities like Gold, Silver does work upon a the system of Demand and supply, Though the system of Soft commodities like Wheat, Sugar, etc does depend upon the weather a lot, because its common that weather can play an vital role in the output of agricultural commodities. But overall the same concept of demand supply does work here like other financial markets where we goes through with technical analysis, or support and resistance analysis, trend analysis etc.
Features of Commodity Trading Market:
1.High Volatility: if you are a trader who like’s to do trade with high volatility then commodity trading would be a great place for you. A high volatility system does work here and most of time you will come to know that a great amount of pips movement does appear during the market working days, Especially in Gold, Silver and in some other hard commodities a big volatility can be seen through a uptrend, downtrend structure, futhermore as we know that in sideways condition we all need patience and movement volume can be lower in sideways market compare to other trading days.
2.Trading Contracts: There are three types of contracts that are used in commodity trading market, such as spot contract, forward contract, & future contract. here spot contract is a short term contract in which a contract of buy and sell has done with the aim of instant settlement, on the other hand a forward contract that include’s a fixed price settlement which is called as an hedging technique also, the last one is future contract this is a contract in which a legal settlement has done between two parties buyer and seller where they do trade for a predetermined price at a distinct date.
3.Demand & Supply:Same like other financial markets commodity market does contain the rule of demand and supply as well. All the tradable commodities has a deep a relation with demand and supply principle. The other elements of commodity trading would be support and resistance which is same like demand and supply, trend analysis, most famous technical chart patterns etc.
4.Risk & Reward: If you are a trader or investor who like’s to work upon a theory of risk and reward then commodity trading will be a great option for you, especially the gold, crude,silver, and so many other commodities provide a great support to do trade with a wonderful handsome risk & reward trading system.
List of Top US Commodity Exchange’s:
before knowing about the US Commodity Exchange’s its necessary to understand the meaning of a commodity exchange at first which will make it more clear for you to understand the rest aspects without any confusion.
What is a Commodity Exchange?
Commodity exchange is a platform where buyers and sellers participate to exchange the commodities with each other, All types of listed commodities can be traded in a commodity exchange those can be hard commodities as we as the soft commodities. Commodity Exchange is also called as an legal entity who control the contracts through a set of standard trading rules which helps to reduce the problem of fraud too.
Furthermore Commodity futures trading commission called as CFTC is an US govt agency who regulates the market of commodity futures, options, etc. The need of this does appear due to the The Commodity Exchange Act, which indicates the prevention of fraudulent dealings in trading of future contracts. CFTC has its own official Govt website which helps trader’s and investor’s to monitor the big player’s or commercial, non commercial future’s holdings in commodities, forex, stocks, etc.
Well the list of US Stock Commodity exchange is not limited at all, though the top 3 most valuable and top US Commodity stock exchanges are Chicago Mercantile Exchange (CME), Chicago Board Of Trade (CBOT), New York Mercantile Exchange (NYMEX), Chicago Board options exchange (CBOE) etc.
1.Chicago Mercantile Exchange: Founded in 1898 owned by the CME group is one of the world’s largest Commodity Exchange based in Chicago (USA).Chicago Mercantile Exchange Provide a facility of trading in future contracts, options, etc. All the Commercial and Non Commercial trader’s future holdings data can be found on CFTC official website which is called as a commitment of trader’s data too.
2.New York Mercantile Exchange: Founded in 1882 owned by the same CME group, NYMEX is another largest commodity future exchange of the USA. Due to the involvement of CFTC or regulation of CFTC (commodity of future trading commission U.S Govt agency) NYMEX has a great value and its also known as one of the top commodity exchange in the world.
3.Chicago Board Of Trade: Founded in 1848 its one of the largest USA futures and option exchange from chicago, owned by CME Group, Its one of the World’s very old futures and options exchange compare to other two, CME was founded in 1898, NYMEX was founded in 1882. So as we has read above that all these top commodity exchanges are subsidiary of CME Group.
Final Words: There is risk involved in commodity market, make sure that you are doing a proper market analysis and research before entering in the market, do proper training and invest or trade within a proper money management and risk management. Thank you for understanding