Kinds of exchanges: a commodity exchange
There are the following Kinds of exchanges: stock and commodity that depends on the subject concluded on these trades. They have their own specifics and certain properties. In this Chapter we look at commodity exchanges.
Commodity exchange is to trade in food products, raw materials and energy resources, as well as other goods of mass consumption. The subject of trade Mercantile exchange can use a wide range of goods, and can specialize in certain types of, for example, on oil, grain or fur. Commodity exchanges are of great importance in international trade relations. With their help, is to establish the market price of the goods.
In our days commodity exchanges remained only in some countries and their turnover is quite low. Usually they are one of the ways of wholesale trade of products of local importance, which is characterized by low concentration of consumption, marketing and production. The largest commodity exchanges are working in Malaysia, India and Indonesia.
Commodity exchange is determined by the legislation of the Russian Federation as an organization, possessing the rights of a legal person, which forms the wholesale market, and regulating and organizing exchange trade, which is conducted in the form of a public auction held by certain rules in a certain place.
Many of the functioning of commodity exchanges operate in the form of continuous auctions, the passing over of the working day. In this time of vendors make the offer, and buyers apply. The transaction is then, when the interests of both parties coincide.
Money for those or other goods shall be paid in the same time with their delivery. But, increasingly, on commodity exchanges deals are concluded on the deferred delivery conditions, when the item is purchased at the price set at the moment of conclusion of the transaction, but he comes after a certain time. This is the futures trading. In the modern world, when market relations are developing with a rapid rate, commodity exchanges have not lost their significance, and their Institute was transformed into the market of the rights to the goods.
Here we got acquainted with the concept of exchange and learned about the two kinds of exchanges, their features and basic functions. The rest of the concepts with which we will explore in the future, will be associated only with the stock exchanges, as more common and convenient. In the next Chapter we discuss the major participants of the stock exchange.
