commodity trading

Definition

An investing strategy wherein goods are traded instead of stocks. Commodities traded are often goods of value, consistent in quality and produced in large volumes by different suppliers such as wheat, coffee and sugar. Trading is affected by supply and demand, thus, limited supply causes a price increase while excess supply causes a price decrease.

Use commodity trading in a sentence

You should always make sure that you have done all the research you can before you start any commodity trading.

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Since they were interested in the costs of the materials for the products they were producing they decided to get involved with commodity trading.

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Commodity trading, which includes energy, metals, livestock, and agriculture, has always had a very profound effect on local economies, able to bring large amounts of wealth in a single season, or devalue the prices of a wide range of goods.

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commodities exchange United States Natural Gas Fund