A commodity is a basic commercial good that is interchangeable with other similar goods. In the United States, it is a statutorily defined term under the Commodity Exchange Act that includes, among other things, physical commodities, such as agricultural products or natural resources, as opposed to financial instruments like currencies.

Commodity futures contracts are agreements to buy or sell commodities in specific quantities and prices on a particular date in the future. Metals, grains, and other products, as well as financial instruments, like currencies, are traded in the futures market. Generally, trading in futures contracts has to be conducted on the floor of a commodity exchange.

The National Futures Association (NFA). requires registration of anyone who trades futures with the public or advises about futures trading. You should check the NFA, before investing in commodity futures.

The U.S. Securities and Exchange Commission regulates securities, not commodities. The Commodity Futures Trading Commission (CFTC) is the federal agency in the United States that regulates futures trading. One common area of fraud in the futures market involves high yield investment opportunities in futures, options, or foreign exchange, also called “forex.” The CFTC has good resources to available to the public to learn more.

Click to rate this post!
[Total: 1 Average: 5]
What are commodities? And who regulates them?

One thought on “What are commodities? And who regulates them?

  • July 11, 2020 at 11:30 am

    Now, I know Futures; security & commodity better.


Leave a Reply

Your email address will not be published. Required fields are marked *