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COMMODITY MARKET. COMODITIES. stuff that is traded on the market without a difference of quality supplies from different suppliers are mutually substitutable products of uniform quality and value produced in large quantities by many different manufacturers
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COMODITIES • stuff that is traded on the market without a difference of quality • supplies from different suppliers are mutually substitutable • products of uniform quality and value produced in large quantities by many different manufacturers • price is determined by supply and demand
TYPES Grains products • wheat • corn • oats Meat products • beef • pork Precious and industrial metals • gold • silver • platinum • palladium • copper • lead
TYPES Energy market • oil • other refinery products Food products • coffee • sugar • cotton • orange juice.
COMMODITIES TRADING • Spot trading „You really see what you buy.“ • Forward contracts Agreement, two parties, fixed future date, fixed future price • Futures contracts Forward, but standardized and transacted through a futures exchange. • Option contracts The buyer of the option gains the right, but not the obligation to engage in that transaction. That´s why the buyer of the option pays option premium to a seller.
COMMODITY MARKETS • Old China • Japan • 1878 – CBOT in Chicago • Hedging, speculations • U.S. regulator -> Commodity Futures Trading Commission.
COMMODITIES EXCHANGES • CME Group • New York Board of Trade • Tokyo Grain Exchange Others: • Africa Mercantile Exchange • Hong Kong Mercantile Exchange • London Metal Exchange
COMMODITY PRICE INDEX • Reuters/Jefferies CRB Index • Standard & Poor's Commodity Index • Dow Jones Commodity Index • Goldman Sachs Commodities Index • Rogers International Commodity Index
DISCUSSION • Do youknowanother index in financial market orisitespeciallyforcommodities? • Whichcommodityismostlytraded? • Do youknowanyCzechcommodityexchange? • Where is bigger volume? Futures or options?