Commodity trading Flashcards
1
Q
What is a primary commodity?
A
A raw material or primary agriculture product that can be bought and sold
2
Q
How are primary commodities grouped?
A
Soft, hard and oils
3
Q
What are soft commodities?
A
Agricultural primary commodities (titanium, coffee, rubber)
4
Q
What are hard commodities?
A
Minerals, ores and metals
5
Q
Oil commodities
A
Don’t include fuels unless specified
6
Q
What is a spot market?
A
Buying products when the price is low
7
Q
What is a futures market?
A
Buying products now to secure the supplies
8
Q
What is price volatility?
A
Price fluctuations of a commodity
9
Q
What are the percentages for market trading?
A
- 30% of goods and services is countries producing all goods then exporting the final product
- 70% is intermediate parts from other countries to produce a final product to then be exported
10
Q
Why do demand changes and fluctuations occur?
A
- Change in consumer behaviour
- Change in policy/law
- Change in income
11
Q
Supply changes
A
- Yield increase, inventions and technology
- Temporary supply shocks
- Permanent supply shocks
