Commodity Futures Trading

Commodity futures trading involves buying and selling contracts for the future delivery of physical goods, like oil, grain, or metals. Traders agree to a price today for a commodity to be delivered at a specified date in the future. This practice helps producers hedge against price changes and allows speculators to profit from price movements without handling the actual commodities. It plays a crucial role in price discovery and risk management in the markets, providing liquidity and enabling participants to navigate volatility in supply and demand.