A commodity market is a market that trades in the primary economic sector rather than manufactured products, such as cocoa, fruit and sugar. Hard commodities are mined, such as gold and oil. Futures contracts are the oldest way of investing in commodities. Commodity markets can include physical trading and derivatives trading using spot prices, forwards, futures, and options on futures. Farmers have used a simple form of derivative trading in the commodity market for centuries for price risk management.
In finance, a futures contract is a standardized legal contract to buy or sell something at a predetermined price for delivery at a specified time in the future, between parties not yet known to each other. The asset transacted is usually a commodity or financial instrument. The predetermined price of the contract is known as the forward price or delivery price. The specified time in the future when delivery and payment occur is known as the delivery date. Because it derives its value from the value of the underlying asset, a futures contract is a derivative.
A futures exchange or futures market is a central financial exchange where people can trade standardized futures contracts defined by the exchange. Futures contracts are derivatives contracts to buy or sell specific quantities of a commodity or financial instrument at a specified price with delivery set at a specified time in the future. Futures exchanges provide physical or electronic trading venues, details of standardized contracts, market and price data, clearing houses, exchange self-regulations, margin mechanisms, settlement procedures, delivery times, delivery procedures and other services to foster trading in futures contracts. Futures exchanges can be organized as non-profit member-owned organizations or as for-profit organizations. Futures exchanges can be integrated under the same brand name or organization with other types of exchanges, such as stock markets, options markets, and bond markets. Non-profit member-owned futures exchanges benefit their members, who earn commissions and revenue acting as brokers or market makers. For-profit futures exchanges earn most of their revenue from trading and clearing fees.
The New York Mercantile Exchange (NYMEX) is a commodity futures exchange owned and operated by CME Group of Chicago. NYMEX is located at One North End Avenue in Brookfield Place in the Battery Park City section of Manhattan, New York City.
The International Exchange, now ICE Futures, based in London, was one of the world's largest energy futures and options exchanges. Its flagship commodity, Brent Crude was a world benchmark for oil prices, but the exchange also handled futures contracts and options on fuel oil, natural gas, electricity, coal contracts and, as of 22 April 2005, carbon emission allowances with the European Climate Exchange (ECX).
Brent Crude may refer to any or all of the components of the Brent Complex, a physically and financially traded oil market based around the North Sea of Northwest Europe; colloquially, Brent Crude usually refers to the price of the ICE Brent Crude Oil futures contract or the contract itself. The original Brent Crude referred to a trading classification of sweet light crude oil first extracted from the Brent oilfield in the North Sea in 1976. As production from the Brent oilfield declined to zero in 2021, crude oil blends from other oil fields have been added to the trade classification. The current Brent blend consists of crude oil produced from the Forties, Oseberg, Ekofisk, Troll oil fields and oil drilled from Midland, Texas in the Permian Basin.
Osaka Exchange, Inc., renamed from Osaka Securities Exchange Co., Ltd., is the largest derivatives exchange in Japan, in terms of amount of business handled.
An energy derivative is a derivative contract based on an underlying energy asset, such as natural gas, crude oil, or electricity. Energy derivatives are exotic derivatives and include exchange-traded contracts such as futures and options, and over-the-counter derivatives such as forwards, swaps and options. Major players in the energy derivative markets include major trading houses, oil companies, utilities, and financial institutions.
The Dalian Commodity Exchange (DCE) is a Chinese futures exchange based in Dalian, Liaoning province, China. It is a non-profit, self-regulating and membership legal entity established on February 28, 1993.
European Energy Exchange (EEX) AG is a central European electric power and related commodities exchange located in Leipzig, Germany. It develops, operates and connects secure, liquid and transparent markets for energy and related products, including power derivative contracts, emission allowances, agricultural and freight products.
Options Clearing Corporation (OCC) is a United States clearing house based in Chicago. It specializes in equity derivatives clearing, providing central counterparty (CCP) clearing and settlement services to 16 exchanges. It was started by Wayne Luthringshausen and carried on by Michael Cahill. Its instruments include options, financial and commodity futures, security futures, and securities lending transactions.
Intercontinental Exchange, Inc. (ICE) is an American company formed in 2000 that operates global financial exchanges and clearing houses and provides mortgage technology, data and listing services. Listed on the Fortune 500, S&P 500, and Russell 1000, the company owns exchanges for financial and commodity markets, and operates 12 regulated exchanges and marketplaces. This includes ICE futures exchanges in the United States, Canada, and Europe; the Liffe futures exchanges in Europe; the New York Stock Exchange; equity options exchanges; and OTC energy, credit, and equity markets.
Pakistan Mercantile Exchange Limited is Pakistan's first futures commodity market having its registered Head office in Karachi, Sindh. It is the only company in Pakistan to provide a centralized and regulated place for commodity futures trading and is regulated by Securities and Exchange Commission of Pakistan (SECP). It has started full trading activities on 11 May 2007.
The Shanghai Futures Exchange is a futures exchange in Shanghai, China formed from the amalgamation of the national level futures exchanges of China, the Shanghai Metal Exchange, Shanghai Foodstuffs Commodity Exchange, and the Shanghai Commodity Exchange in December 1999. It is a non-profit-seeking incorporated body regulated by the China Securities Regulatory Commission.
The Ukrainian Exchange was founded in 15th of May, 2008 and its operation premises are situated at 7g, Tropinina Street, Kyiv.
LCH is a financial market infrastructure company headquartered in London that provides clearing services to major international exchanges and to a range of OTC markets. The LCH Group includes two main entities: LCH Limited based in London and LCH SA based in Paris.
The international shipping industry can be divided into four closely related shipping markets, each trading in a different commodity: the freight market, the sale and purchase market, the newbuilding market and the demolition market. These four markets are linked by cash flow and push the market traders in the direction they want.
INATIN which agreed to settle with the coordination of the Indonesia Commodity Derivative Exchange (ICDX) and PT Banda Graha Reksa. It was formally launched on February 1, 2012.
The Saint-Petersburg International Mercantile Exchange (SPIMEX) is a Russian commodity exchange incorporated in 2008. It has offices in Moscow, Saint Petersburg and Irkutsk.
