A commodity is a basic good or raw material that is used to produce more complex goods. You can think of commodities as the building blocks of the global economy – they’re used to create products that we rely on every day. Examples of commodities include oil, gold, copper, and sugar.
What separates commodities from other goods is the fact that they are standardised and interchangeable. This means that two equivalent units of the same commodity will be more or less identical, no matter where they are produced. For example, one ounce of gold from a mine in Brazil will be identical to one ounce of gold from a mine in Australia.
Commodity trading
Commodities have been traded for thousands of years. In the past, they were traded physically. Today, however, commodity trading takes place on exchanges around the world such as the London Metal Exchange (LME) and the Chicago Mercantile Exchange (CME). To trade commodities, you need an account with a trading platform that offers access to the commodity markets.
At FOLLOWME, trading commodities is straightforward. eToro’s platform is easy to use and enables traders and investors to trade a wide range of commodities.
Reprinted from eToro, the copyright all reserved by the original author.
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