- Commodity type
- Hard
- Soft
- Agricultural products/livestock
- Value
- Spot
- Sold for immediate delivery
- Within a few days
- Physical markets
- Cash markets
- Derivative
- Delivery in the future
- Commodity futures
- Forward markets
- Forwards, futures and options
- Use the spot market as underlying Asset
- Ownership in the future based on today’s price
- Precious metals
- Can be a good hedge against inflation
- Broad commodity exposure can diversify portfolio
- Hard to get direct access
- Easier to invest in companies that do
- Stock prices will somewhat track the commodity prices