Commodity Trading
Commodities form the backbone of our economies, underpinning critical sectors such as infrastructure, communications, energy, food, clothing, and more. As such, commodity markets play a vital role in modern life. These markets attract a diverse range of participants, including producers, consumers, end users, speculative traders, and investors worldwide.
Commodity contracts, which are the standardised units in which commodities are traded, are typically deliverable. This means the buyer must be able to take delivery of the underlying commodity at the conclusion of the contract, while the seller must be able to fulfil that delivery obligation. In practice, however, physical delivery is usually limited to commercial traders and end users. Speculative traders generally close their positions or roll them forward well before the delivery date. Most retail traders, on the other hand, trade commodities using non-deliverable, cash-settled instruments such as Contracts for Difference.