Commodity markets are markets in which raw or primary products are exchanged. For example, one can gain market exposure to products such as gold, oil, live cattle and soybeans by trading commodities.

Raw commodities such as these are traded on regulated commodity exchanges like the Chicago Board of Trade, which merged with the Chicago Mercantile Exchange in 2007. Each commodity can be bought and sold in standardized contracts.

Online trading, sometimes called etrading, is a method of trading securities, commodities and foreign currency. You can also exchange traded derivatives electronically. Online trading uses information technology to bring together buyers and sellers via electronic media to create a virtual marketplace.

NASDAQ, NYSE Arca and Globex are examples of electronically traded marketplaces. Exchanges that facilitate electronic trading in the United States are regulated by either the Securities and Exchange Commission or the Commodity Futures Trading Commission, and they are usually called electronic communications networks, or ECN’s.

Historically, commodity markets were physical locations where buyers and sellers met and negotiated. With the improvement in communications technology in the late 20th century, the need for a physical location became less important with the ability to transact from remote locations.

With high-speed Internet access now readily available, the amount of online commodity trading has greatly increased in recent years. Traders worldwide are now able trade products that were once only available through floor brokers.

Commodity trading offers the ability to gain unique exposure to the global market that doesn’t require you to invest in a specific company or be dependent on any one single economic catalyst. Commodities allow traders to speculate at both a micro- and macro-economic level.

Here are the main categories of commodities you can trade online:

Agricultural (Grains, and Food and Fiber)
Livestock & Meat
Energy
Precious metals
Industrial metals

Trading in the Foreign Exchange or Futures markets involves a significant and substantial risk of loss and may not be suitable for everyone. You should carefully consider whether trading is suitable for you in light of your age, income, personal circumstances, trading knowledge, and financial resources. You should only trade with money you can afford to lose. There is no guarantee that you will profit from your trading activity and it is possible that you may lose all or some of your investment. Past performance is not indicative of future results.

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