What are the different types of commodity derivatives?

different types of commodity derivatives can range from energy sources and mined metals to textiles. There are also livestock, fruits and vegetables and ingredients from the forest. In principle, all commodity derivatives are materials that are not a financial type such as stocks, bonds and hard cash. These energy sources have become very important commodities, as many manufacturing companies need a significant amount of these fuels to operate their factories and plants. For this reason, energy sources are very profitable, but their value can also be very unstable, especially if there are incidents such as wars and extensive calamities. Renewable and “green” energy such as solar energy, hydroelectric and biofuvalivéces. Their value is also very stable and does not depend on economic situations. Gold and silver are among the most in demand metals because they are used for expensive jewelry and for ranking of currency coins. Other precious metals include platinum, palladium and rhodium. Metal alloys such as steel are also valuable commodities because they are largely used for building buildings, skyscrapers and machines.

Investors also explored textile, economic and agricultural production as commodities derivatives. These materials and resources are usually in high demand because they are spent on the daily needs of a person, especially for food. Livestock would usually include beef, chicken, pork and sheep. On the other hand, agricultural production is more diverse, from grains such as corn, wheat and oats, to other plants such as coffee shrubs, cocoa trees and sugar cane. Foods obtained from plants have become so important that it is not unusual for the developed country to buy part of the land from the territory of the development country and to supply food for the former.

commodity derivatives allow investors to invest in non -financial sources without owning or spending too much money. TheirValues ​​are also easier to predict because they are dependent on the law of demand and supply. If there is a high product demand, the investor can earn large profits; However, if the value of the product depreciates, the investor can trade or sell his investment to replace his loss.