commodity future contract
Commodity market - this is the only segment of the financial markets, which shows the changes of the prices of real assets. Its instruments are the source of goods (fixed-term spot market), as well as their derivatives - commodity future contracts, options. All of them are traded on stock exchanges and are standardized.
All commodity futures contract can be divided into several groups:
?grains;
?live animals and meat products;
?timber and energy resources;
?oilseeds and products of their processing;
?non-ferrous and precious metals;
?other agricultural goods.
The use of commodity futures contract can be from a number of purposes: for hedging (insurance risk), the real supply, as well as for the extraction of profit in speculative operations. It is worth noting, that the commodity future contract played a key role in the financial markets until 1970. After this, the leading positions are taken by the monetary and financial instruments.
If you look at the modern structure of the commodity futures contract of the USA, the 60% of the exchange's turnover falls on financial instruments, 19% - agricultural goods, 16% - industrial group of the goods; 5% - currency.
