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Related to commodity: Commodity market, Commodity Futures


A commodity is food, metal, or another fixed physical substance that investors buy or sell, usually via futures contracts.


A generic, largely unprocessed, good that can be processed and resold. Commodities traded in the financial markets for immediate or future delivery are grains, metals, and minerals. They are generally traded in very large quantities. See also futures contract.


Commodities are bulk goods and raw materials, such as grains, metals, livestock, oil, cotton, coffee, sugar, and cocoa, that are used to produce consumer products.

The term also describes financial products, such as currency or stock and bond indexes.

Commodities are bought and sold on the cash market, and they are traded on the futures exchanges in the form of futures contracts.

Commodity prices are driven by supply and demand. When a commodity is plentiful -- tomatoes in August, for example -- prices are comparatively low. When a commodity is scarce because of a bad crop or because it is out of season, the price will generally be higher.

You can buy options on many commodity futures contracts to participate in the market for less than it might cost you to buy the underlying futures contracts. You can also invest through commodity funds.


any economic GOOD but in commercial circles more specifically agricultural produce and minerals such as wheat, tea, copper, iron ore, etc. See COMMODITY MARKET, INTERNATIONAL COMMODITY AGREEMENT.


  1. 1see GOODS.
  2. raw materials rather than goods in general: for example, tea, coffee, iron ore, aluminium, etc.
References in periodicals archive ?
Anyone can speculate in oil or gas, store the underlying commodity and sell it at a more auspicious time.
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The Islamic funds industry made my job pretty easy this issue - there actually isn't a lot of data on Islamic commodity funds to analyse.
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Dot has organized this educational seminar course on commodity markets to cultivate an understanding of global commodity markets and how they affect our daily lives and how they correlate with other financial markets as well as having the students recognize the importance of commodity markets in the global economy and in society.