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When we talk about the available \u00a0commodities tradings markets, we tend to group them into categories or sectors or asset classes based on their likeness and similarity.<\/span><\/p>\n Below we\u2019ll highlight the main asset classes, include some of the more well-known commodity trading futures contracts as examples as well as some other information useful for traders.<\/span><\/p>\n Currencies<\/b>: \u00a0With all the different types of currency being exchanged in this world as a means of making transactions, some are so widely used \u2013 and trusted \u2013 there are also available specific currency futures contracts as a means of trading large blocs of that particular currency. \u00a0Some of the more prominent futures contracts are the Euro (equal to trading \u20ac12,500), the Japanese Yen (equal to trading \u00a512,500,000) and the British Pound (equal to trading \u00a362,500). Other important currency futures contracts include the Swiss Franc, Australian & Canadian dollars and Mexican Peso. \u00a0These markets are traded on the Chicago Mercantile Exchange 23 hours a day, from 5:00 P.M. around the clock to 4:00 P.M, Central Time.<\/span><\/p>\n Energies<\/b>: While there are hundreds and hundreds of energy futures contracts listed on the NYMEX exchange – sub-categorized under asset classes like coal, electricity, ethanol, crude oil, natural gas and refined products \u2013 hands down the all-time trading leaders in terms of daily volume number just five: West Texas Crude Oil, Brent Crude Oil, Reformulated Unleaded Gas, Henry Hub Natural Gas and Ultra-Low Sulphur Diesel, more commonly known as Heating Oil. \u00a0Like all futures contracts, energy futures are leveraged products. For example, one Crude Oil futures contract controls 1,000 barrels of the product. Energy products influence every facet of our lives. Not surprisingly, they are some of the most widely traded futures contracts in the world.<\/span><\/p>\n Financials<\/b>: Financial Futures are associated with those futures contracts whose underlying assets are interest-bearing instruments. \u00a0Those traded on U.S. exchanges include futures contracts whose underlying assets have longer-term maturities, like the 30-yr. Treasury Bond and the 10-yr. Treasury Note (traded on the Chicago Board of Trade). \u00a0Futures contracts whose underlying assets have short-term maturities include the Eurodollar (90 days), traded on the Chicago Mercantile Exchange. Its underlying asset is a 90-day deposit of 1 million U.S. dollars in banks outside the United States \u2013 in Europe, Tokyo or Beijing. \u00a0The Eurodollar is largest futures contract in the world. Prior to the electronic trading, the Eurodollar trading pit at \u201cthe Merc\u201d was the largest trading pit ever, nearly the size of a football field.<\/span><\/p>\n Metals<\/b>: \u00a0Futures contracts whose underlying assets are certain metals include Gold, Silver, Copper, Platinum and Palladium, all traded on the COMEX Exchange. \u00a0\u00a0As was the case as far back as 4,000 B.C. \u2013 the age of the oldest-known adorned artifacts – gold still takes the top prize in terms of futures market trading interest. \u00a0These days, apart from its intrinsic value, gold\u2019s attractiveness is also derived from its standing as a \u201csafe haven\u201d asset, as well as an inflation hedge. Given the nick name \u201cDr. Copper,\u201d for its honorary degree in economics, the Copper futures contract\u2019s underlying asset is 250,000 pounds of the metal first used by humans. \u00a0It\u2019s so widely used \u2013 being a good conductor of electricity, attractive for a wide range industrial applications and relatively inexpensive compared to other metals \u2013 its futures contract\u2019s price is seen as a global economic indicator.<\/span><\/p>\n Grains<\/b>: \u00a0Of all the futures contracts traded on U.S. exchanges whose underlying assets are tangible commodities, as opposed to those that are \u201ccash settled\u201d (more on those later), grain futures are the hallmark asset class. \u00a0It was this commodities trading that spurred the creation of a central marketplace; farmers and buyers could sell and buy corn under established procedures for weighing and grading their crops. As farmers and buyers began making early-year commitments to conduct transactions later in the crop year, the futures contracts as we know them evolved. \u00a0Agreed-upon contracts could now change hands before the agreed-upon date with and between other participants- essentially during the entire crop year. Today, wheat, corn, oats, soybeans and its main by-products soybean oil and soybean meal are enormous markets. And with the vicissitudes of weather (temperature, precipitation) and its effects on crop quality being a major factor in determining prices, grain futures can be some of the most volatile markets traded today.<\/span><\/p>\n Meats<\/b>: Alas, when we talk about livestock futures, the one contract widely considered the iconic commodity in popular culture \u2013 Pork Bellies \u2013 is now a distant memory. \u00a0Delisted in 2011, in its hey days in the late \u201870\u2019s and early 80\u2019s the \u201cbellies\u201d pit was the center of excitement on the Chicago Mercantile Exchange. Today, Lean Hogs is the futures contract for the pork trader. \u00a0For beef interests, Live Cattle and Feeder Cattle trade.<\/span><\/p>\n Indices<\/b>: \u00a0Some of the more heavily traded futures contracts among speculative traders are stock index futures contracts and not surprisingly. \u00a0Among all subjects financial in nature we think of in the world, stock indexes like the Dow Jones Industrial Average, the S&P 500 and Nasdaq Composite \u2013 and the stocks that make them \u2013 are the most often discussed, analyzed and reported on. \u00a0\u00a0Oddly, stock index futures were a rather late arrival, with the S&P 500 and Nasdaq futures contracts first introduced in 1982. It wasn\u2019t until 1997, in the interest of increasing accessibility through a reduced multiplier, that the E-mini line of futures was introduced. \u00a0All indexes\u2019 prices are a multiplier of the value of the prices of all the stocks within their individual indexes. And unlike other futures contracts, stock index futures contracts do not involve physical delivery; you can\u2019t actually conduct a transaction of little slices of the 500 stocks in the S&P 500, for example. \u00a0Instead, the contracts are cash settled, so the buyer and seller receive the cash difference (credited or debited depending on the outcome of the trade) on the last day of the contract\u2019s life. Today, stock index futures are traded all over the world. Their underlying assets are some of the most well-known entities in finance: Hong Kong\u2019s Hang Seng, Japan\u2019s Nikkei, the United Kingdom\u2019s \u201cFootsie\u201d (FTSE), \u00a0Germany\u2019s DAX, France\u2019s CAC 40.<\/span><\/p>\n Softs<\/b>: \u00a0Cocoa, coffee, cotton, orange juice (who doesn\u2019t remember the famous scene in Trading Places), and sugar. \u00a0These futures contracts\u2019 underlying assets make up some of the oldest futures contracts traded. They represent staple products we all consume and they\u2019re worthy opportunities for allocating risk. \u00a0Some of the longest-remembered bull and bear markets \u2013 and some of the most volatile \u2013 in all commodities trading have involved these markets. Weather\u2019s beneficial and adverse effects on these commodities\u2019 crops have made for some historical moves.<\/span><\/p>\n Disclaimer<\/i><\/b> – Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. \u00a0Past performance is not indicative of future results. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.<\/span><\/i><\/p>\n","protected":false},"excerpt":{"rendered":" When we talk about the available \u00a0commodities tradings markets, we tend to group them into categories or sectors or asset classes based on their likeness and similarity. Below we\u2019ll highlight the main asset classes, include some of the more well-known commodity trading futures contracts as examples as well as some other information useful for traders. 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