Candlestick Trading Blog

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There are many different types of commodities traded on the commodities exchange. There are also many different major exchanges available to investors when trading commodities. Each exchange is specific to certain commodities, and other exchanges trade in an entire different set. The commodities are grouped in a way that makes it easier to compare commodity price, research each commodity, and to make trading more convenient. In today's article we will discuss the different exchanges available for commodity investing a well as the different groups in which commodities are categorized.

The four major commodity exchanges include:

1) New York Mercantile Exchange (NYMEX) – This is exchange is one of the oldest exchanges in the United States and it specialized in metal products and petroleum. It was originally in Chicago but eventually moved to New York and it includes a large variety of commodities available to commodities traders.

2) New York Board of Trade (NYBOT) – This was the first commodities exchange to be established in the United States, and it was established in New York City. In addition to trading commodities such as cotton, coffee, cocoa and sugar, it also trades currency as well. This exchange also trades many agricultural items as well.

3) Chicago Mercantile Exchange (CME) – This exchange is unique in that the weather derivative is traded here. Weather is speculated on at different times of the year, making this exchange unique in nature. In addition, it has been in business for over 100 years with hogs, milk, lumber, fertilizer, feeder cattle, and pork bellies as the main commodities traded on this commodities exchange. This exchange located in Chicago, now trades single stock futures, includes foreign exchange trading, and also serves as a marketplace for the stock index, and interest rates.

4) Chicago Board of Trade (CBOT) – This exchange has recently added electronic trading features but initially only traded agricultural commodities. It was established in the 1840's and it now offers options contracts as well as futures on products such as gold, energy, silver, and U.S. treasury bonds.

There are other exchanges around the world including one in Japan and London in addition to the commodities exchange listed above. 

Commodities are also categorized by five different groups including energy, grains, softs, meats and financials. Energy commodities include natural gas, coal, crude oil, heating oil, petroleum and its byproducts. There are additional energy commodities that are included that are not listed here as well. Grains include products such as wheat, rice, soybeans, oats, and corn, while softs include products such as cotton, coffee, sugar and cocoa. Meat products include lean hogs, live cattle, and pork bellies in addition to others. Lastly, financials commodities are available for those investors who would rather invest in commodity futures or options instead of investing in the products themselves. Due to this, financial products are also listed on the same exchanges.  

The commodities exchange is a great place for investors to make money. If you are interested in commodity trading, continue to do research to find out if this is an investment option that works for you.