CommoditiesCommodities are goods or raw materials. By commodities, we mainly refer to primary products, raw materials or agricultural products, which have been standardized according to the customs of the trade, so that they can be bought or sold without further specification.
The high standardization of the products permits these goods to be used as pure trade objects, which means that they are no longer bought in order to meet one's own requirements, rather traded in arbitrage over time. Such goods are frequently traded on various markets, so that an act of arbitrage can occur on several trading exchanges simultaneously.
The New York Mercantile Exchange (NYMEX), the International Continental Exchange (ICE), and the Chicago Board of Trade (CBOT) are famous commodities stock exchanges; however, the bulk of the business transpires outside of the exchanges on the so-called over-the-counter market (OTC-Market).
Forward Contracts of GoodsThe better part of the business consists of forward contracts.
Forward contracts are legal closings with deferred settlement date or time period. The settlement takes place "buying forward".
As a result, the market player can hedge against price changes far in advance of the delivery date, thus securing himself from market fluctuations. Although forward contracts have a bad reputation, they are an indispensable component of business risk management and in the export business assume the same function as a hedge against currency fluctuation.
DerivativeToday, trade of physical goods has been replaced many times over by the much simpler trade of derivatives. By derivatives, one refers to contracts that are derived from physical core businesses.
Financial futures, options or swaps are typical derivatives.
Power, Gas, and Emissions Certificates
Power, gas, and emissions certificates too, will be designated as
commodities. On the one hand, these products are traded in order to cover
an original cost, say for example, to offset production; on the other hand,
they are also traded as purely speculative objects. In this duality lies
the opportunity for the market player, regardless of whether they are used
to cover costs or employed for pure speculation.
(German-French Power Exchange)
(European Energy Exchange)
(Austrian Power Excahnge)
(Consulting Company with focus on Energy Business)
(Institut for energy business and technology, Consulting Company with focus on Energy)
(Lawyer Company Becker, Büttner Held, with focus on the Energy Busines)
(Leading Energy Broker)
(Supplier for Green Energy)
(Producer of Energy Storage Systems)
(Supplier for PV-Power in Berlin)