What is the understanding of commodities and commodities? Mainly refers to some typical material goods used for industrial and agricultural production or consumption and bought and sold in large quantities. Although these goods often exist in the circulation of the whole market, we should know that they are often not retail. For example, in the financial investment market, bulk commodities refer to those commodities that can be homogenized, traded and widely used as industrial basic raw materials. These commodities are mainly divided into three categories, one is energy commodities, the other is basic raw materials, and the third is agricultural and sideline products, which means crude oil, steel, iron ore, coal, non-ferrous metals and so on are all commodities.
Because there are many kinds of commodities in the world, one commodity futures after another will often be formed: but it should be noted here that no exchange has all kinds of commodity futures in the world. Mainly because the scope of bulk futures is very wide, just like eggs and apples have futures markets, and they are all commodities. But careful observation shows that there is no corresponding futures contract for other meats on the market. Combined with the above, we have made some comments on the characteristics of bulk commodities, and the general principles are mainly divided into the following points:
First, commodities are often those we are familiar with, that is, commodities with a very large transaction volume. Because these commodities will have a great scale effect, futures contracts in the market are often a form to balance the price fluctuations caused by such commodities.
Second, price fluctuation is one of the most important characteristics of commodities, because traders with large price fluctuations often need to use forward prices to determine the existing prices to avoid the risks brought by these prices.
Third, one of the characteristics of commodities, as well as the very large supply demand, is mainly because the function of the futures market is mainly based on the premise that both the supply and demand sides of commodities participate in transactions extensively, and the existence of commodities can form authoritative prices.
Fourth, bulk commodities are very easy to be classified and standardized, which means that futures contracts generally stipulate the quality standards of delivery commodities in advance, otherwise it will be difficult to standardize. Commodities must be easy to store and transport, because commodity futures are long-term delivery commodities, and these characteristics can often ensure the smooth delivery of physical futures.
The following picture shows the K-line chart of Shenzhen Stock Exchange:
This article ends the introduction of commodities here. I hope the above content is helpful to you. After reading this article, please pay more attention to us if you want to know more about the basics of financial securities, such as the impact of raising interest rates. Thank you very much for reading this article.