Commodity Futures


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Commodity Futures Contract

An agreement to buy and sell a commodity at a certain date at a certain price. For example, Investor A may make a contract with Farmer B in which A agrees to buy a certain number of bushels of B's corn at $15 per bushel. This contract must be honored whether the price of corn goes to $1 or $100 per bushel. Commodity futures contracts can help reduce volatility in the normally volatile commodity markets, but contain the risks inherent to all speculative investing. These contracts may be sold on the secondary market, but the person holding the contract at its end must take delivery of the underlying. See also: Carrying charge, Options contract.

Commodity Futures

Contracts to buy or sell a fixed amount of a commodity (wheat or soy beans, for example) for a fixed price at a future date.
References in periodicals archive ?
In particular, the synchronized boom and bust cycle in 2007-8 in a large number of commodities across the energy, metal, and agricultural sectors has led to a heated debate regarding whether speculation in commodity futures markets caused a bubble in commodity prices.
United States Commodity Funds LLC is the manager of exchange traded securities that are designed to track the movements of the prices of different commodity futures.
So, the article has an aim of providing knowledge through facts and figures to the investors about the Indian Commodity futures market as an investment option and its inclusion in the traditional asset portfolio.
The Forum's theme for this year is "The Establishment of Multi-level Derivatives Markets", which is aimed at analyzing the present status of commodity futures markets in China and will also feature the development of a layered market structure in overseas markets and what China can learn from it along with recent innovations in futures markets.
Tim Knight, Global head of BNP Paribas Commodity Futures Limited, said, 'We have recently seen an upsurge in client demand for the provision of clearing access for power futures contracts.
Its clients can now trade FOREX, equities, metals, fixed income, energies, and other commodity futures and options globally using single account.
First, investors used commodity futures to hedge against equity risk.
The takeover is expected to be completed within fiscal 2011 ending March 2012 as trading on the two commodity futures exchanges has slackened due to tougher regulations on commodity futures.
6 million trading commodity futures, and he concealed those losses through the issuance of false statements to pool participants, the order finds," the CFTC said.
President Obama made Timothy Geithner, who worked for Clinton's Treasury Secretary Robert Rubin, his Treasury Secretary; made Larry Summers, who took over from Rubin, his Chief Economic Advisor; and Gary Gensler, who designed the Commodities Futures Act while working for Bill Clinton, Chair of the Commodity Futures Trade Commission.
of Miami) and Overdahl (Chief Economist at the Commodity Futures Trading Commission) provide an explanatory treatment of the markets for futures, options, and swaps, the three most important types of financial derivatives.
Although commodity futures are by definition margined transactions, commodity investors set aside the contract's full value when they buy.

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