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Commodities exchange
From Wikipedia, the free encyclopedia
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.
Commodities exchanges, usually trade futures contracts on commodities. Such as trading contracts to receive something, say corn, in a certain month. A farmer raising corn can sell a future contract on his corn, which will not be harvested for several months, and guarantee the price he will be paid when he delivers; a breakfast cereal producer buys the contract now and guarantees the price will not go up when it is delivered. This protects the farmer from price drops and the buyer from price rises.
Speculators also buy and sell the futures contracts to make a profit and provide liquidity to the system.
Some examples of commodity exchanges:
- Abuja Stock Exchange (Nigeria)
- Brazilian Mercantile and Futures Exchange (Brazil)
- Central Japan Commodity Exchange (Nagoya)
- Commodity Exchange Hannover (Hannover)
- Chicago Board of Trade (Chicago)
- Chicago Climate Exchange (Chicago)
- Chicago Mercantile Exchange (Chicago)
- Euronext.liffe (Europe)
- European Climate Exchange (Europe)
- HedgeStreet Exchange (California)
- Intercontinental Exchange (Atlanta)
- London Metal Exchange (London)
- Minneapolis Grain Exchange (Minneapolis)
- Multi Commodity Exchange (India)
- National Commodity and Derivatives Exchange (Mumbai)
- New York Board of Trade (New York)
- New York Mercantile Exchange - NYME (New York)
- Shanghai Metal Exchange (Shanghai)
- Tokyo Commodity Exchange (Tokyo)
- Winnipeg Commodity Exchange (Winnipeg)
- Yokohama Commodity Exchange (Yokohama)