•  Commodity includes all kinds of goods.

FCRA defines "goods" as "every kind of movable property other than actionable claims, money and securities".

Futures' trading is organized in such goods or commodities as are permitted by the Central Government.

At present, all goods and products of agricultural (including plantation), mineral and fossil origin are allowed for futures trading under the auspices of the commodity exchanges recognized under the FCRA.

The national commodity exchanges have been recognized by the Central Government for organizing trading in all permissible commodities which include precious (gold & silver) and non-ferrous metals; cereals and pulses; ginned and un-ginned cotton; oilseeds, oils and oilcakes; raw jute and jute goods; sugar and gur; potatoes and onions; coffee and tea; rubber and spices, etc.

  •  A commodity derivative derives its value from an underlying asset which is necessarily a commodity. To understand the commodity derivatives markets it’s necessary to clear about ‘commodities’.

  •  Commodities, in simple words are any goods that are common and unbranded. Gold, silver, rubber, pepper, jute, wheat, sugar, cotton etc., are some of the common commodities. For e.g. apple juice can be a commodity whereas the ‘Real’ apple juice cannot be called a commodity. You may be surprised to know that in the US commodities markets there are futures available even on cattle. Another feature of commodities is that they are commonly available.

What is a "Commodity Exchange"?

Commodity exchange is an association, or a company or any other body corporate organizing futures trading in commodities.