Commodities and Futures Guide.com

Our team has researched on list of exchanges where commodities are traded on the global financial markets.Here are the list of major exchanges

A commodities exchange is an exchange where various commodities and derivatives products are traded. Most exchange trading floors are divided into octagonal areas, called pits, where traders stand facing one another. Each pit is designated for trading one or more futures contracts. Most commodity markets across the world trade in agricultural products and other raw materials and contracts based on them. These contracts can include spot prices, forwards, futures and options on futures. Other sophisticated products may include interest rates, environmental instruments, swaps, or ocean freight contracts. In essence, the exchange brings the seller of a commodity together with the potential buyer of that commodity to negotiate what price will be paid for the right to possess that commodity at some point in the future.

The exchange provides traders a place to trade and the support facilities necessary to handle trades (i.e. phones and price-reporting and dissemination systems). The Exchange itself, does not set prices or buy or sell for itself. The traders set the price for a given commodity based upon supply and demand for it. The people who are actually trading on the floor must be members of the exchange itself while the general public trades through a brokerage house which maintains a seat on the floor to trade through. The members of each exchange support the running of the exchange by paying dues and assessments.

There are many different exchanges throughout the world that trade in different commodities. Some of the major Exchanges are:

Americas

Brazilian Mercantile and Futures Exchange -São Paulo, Brazil Agricultural, Biofuels, Precious MetalsChicago Mercantile Exchange -Chicago, US Agricultural, Biofuels

Chicago Climate Exchange -Chicago, US Emissions

HedgeStreet Exchange California, US Energy, industrial Metals

Intercontinental Exchange -Atlanta, Georgia, US Energy, Emissions, Agricultural, Biofuels

Kansas City Board of Trade -Kansas City, US Agricultural

Memphis Cotton Exchange Memphis, US Agricultural

Mercado a Termino de Buenos Aires -Buenos Aires, Argentina Agricultural

Minneapolis Grain Exchange -Minneapolis Agricultural

New York Mercantile Exchange -New York, US Energy, Precious Metals, Industrial Metals

U.S. Futures Exchange -Chicago, US Energy

Asia

Bursa Malaysia – Malaysia Biofuels

Central Japan Commodity Exchange – Nagoya, Japan -Energy, Industrial Metals, Rubber

Dalian Commodity Exchange – Dalian, China -Agricultural, Plastics

Dubai Mercantile Exchange – Dubai -Energy

Dubai Gold & Commodities Exchange – Dubai -Precious Metals

Iranian oil bourse – Kish Island, Iran-Oil, Gas, Petrochemicals

Kansai Commodities Exchange – Osaka, Japan -Agricultural

Multi Commodity Exchange – India -Energy, Precious Metals, Metals, Agricultural

National Multi-Commodity Exchange of India Ltd – India – Precious Metals, Metals, Agricultural

National Commodity Exchange Limited

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Bhatinda Om & Oil Exchange Ltd. – India Agricultural

Karachi Precious Metals, Agricultural

National Commodity and Derivatives Exchange – Mumbai- All

Singapore Commodity Exchange –Singapore- Agricultural, Rubber

Tokyo Commodity Exchange -Tokyo, Japan- Energy, Precious Metals, Industrial Metals, Agricultural

Tokyo Grain Exchange – Tokyo, Japan- Agricultural

Zhengzhou Commodity Exchange – Zhengzhou, China -Agricultural

Europe

Commodity Exchange Bratislava – Bratislava, Slovakia- Emissions, Agricultural

Climex – Amsterdam, the Netherlands -Emissions

NYSE Euronext – Europe- Agricultural

European Climate Exchange – Europe -Emissions

London Metal Exchange -London, UK- Industrial Metals, Plastics

Risk Management Exchange – Hannover, Deutschland- Agricultural

Oceania

Australian Securities Exchange – Sydney, Australia Agricultural

As you can see, there is an exchange specific to almost any natural resource available from rubber to emissions.

Know How’s of Future Contracts

Futures Contract

A futures contract is a legally binding standardized agreement between two parties to buy or sell a predetermined amount of a commodity, such as corn, during a specified month in the future (the delivery month) at a price (the future price) which is determined at the time the contract is established

A futures contract gives the holder the obligation to make or take delivery under the terms of the contract, whereas an option grants the buyer the right, but not the obligation, to establish a position previously held by the seller of the option.

Futures contracts, or simply futures, (but not future or future contracts) are exchange traded derivatives . The exchange’s clearing house acts as counterparty on all contracts, sets margin requirements, and crucially also provides a mechanism for settlement

Exchanges Traded across the globe

Futures contracts (as well as options on futures contracts) are traded at 11 different commodity exchanges in the U.S. as well as abroad. Futures contracts on the major domestic agricultural crops are traded at the Chicago Board of Trade (CBOT), the Kansas City Board of Trade, the Minneapolis Grain Exchange, the New York Cotton Exchange and the Coffee, Sugar and Cocoa Exchange.Click here

Benefits Are Gained From Buying and Selling Futures Contracts:

One of the most important benefits gained from trading in the futures market is that traders can assume any of a wide range of commodities or other assets with a relatively small initial investment. The initial investment includes a commission of approximately $50 per contract and a margin. A margin is a good faith deposit. When a trader assumes a futures position, he or she locks in a price for future delivery for the underlying commodity. This fixed price is the future price at which the contract is bought or sold. Subsequently, as the price of the actual commodity rises or falls, the futures price follows suit, making or losing money.

A benefit derived from selling futures contracts is that it enables the trader to establish, in advance, an approximate price for crops he or she intends to harvest and market at some future time. This provides protection against dangerous price swings, and enables speculators to profit from market fluctuations. Speculators are market participants who have absolutely no interest in owning or selling a physical commodity, but have the money to take on risk buying and selling futures contracts in hopes of making a profit.

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