History
What civilization is believed to have traded livestock around 4500-4000 BC?
Sumerian civilization.
What is a commodity?
An economic good or raw material that can be bought and sold.
What is a Commodity Index Fund?
A fund that invests in a basket of commodity futures to replicate the performance of a commodity index.
Name a commodity that falls under the metals category.
Gold, silver, or platinum.
What is the largest commodity exchange in the world?
CME Group.
What was the first organized futures market?
Dojima Rice Exchange in Osaka, Japan.
What distinguishes a spot market from a futures market?
A spot market involves immediate settlement and delivery, while a futures market involves delivery at a future date.
How can investors access commodities through ETFs?
By buying shares in ETFs that track commodity prices or indices.
What are soft commodities?
Agricultural products such as wheat, corn, or coffee.
Where are cocoa futures primarily traded?
New York Board of Trade (ICE).
Which U.S. city became a hub for agricultural commodities in 1848?
Chicago.
What does fungibility mean in commodity trading?
The ability of commodities to be interchanged with others of the same type.
What are CFDs in commodity trading?
Contracts for difference that allow traders to speculate on price movements without owning the underlying asset.
Which category does crude oil belong to?
Energy.
What is the main exchange for trading natural gas?
NYMEX or CME Group.
What act expanded the list of commodities traded in the U.S.?
The Commodity Exchange Act of the 1930s.
Name one example of a hard commodity.
Gold, silver, or oil.
What is a forward contract?
A customizable agreement between two parties for the future delivery of a commodity.
What is an example of livestock traded?
Cattle, hogs, or sheep.
Which exchange is known for trading palm oil?
ICE or Bursa Malaysia.
What year was the Chicago Mercantile Exchange restructured?
1919.
What is the primary purpose of commodity futures?
To hedge against price fluctuations and secure future prices.
What is the main difference between ETFs and ETCs?
ETFs buy futures contracts, while ETCs are notes collateralized by physical commodities.
Name one agricultural commodity that is traded.
What is the role of a clearinghouse in commodity trading?
To ensure the execution and settlement of trades, minimizing the risk of counterparty default.