Commodity Trader

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Definition: Commodity Trader

Commodity trading is an investment plan in which goods are traded. Commodity trader is an individual or an institution who trades commodity contracts on their own account. Commodity brokers execute orders to trade the commodities for their clients and charge them fees.

Commodity traders often trade on the futures and forward contracts and seldom have specific asset being traded. The clients either hedge risks with the derivatives or speculate to gain profit.

The commodities generally traded are gold, oil, silver, sugar, wheat, cotton, cattle and lumber. There are various commodity exchanges working in similar way as stock exchanges.


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