Overview
Explaining the term commodity. Mentioning the types of tradable commodities. Explaining the term commodity exchange. Explaining the term tradable commodity. Stating the requirement for trading. Stating the methods of trading. Stating the benefits of commodity exchange. Identifying the major constraint to commodity trading in Nigeria. Differentiating between commodities and stocks. Similarities between commodities and stocks.
What you'll learn
- Meaning.
- Types
- Agricultural produce
- Solid mineral
- Oil and Gas.
- Tradable.
- Requirement for trading
- Grading system
- Warehousing
- Clearing system
- Standardizing.
- Types:
- Spot
- Forward futures
- Methods of Trading:
- Open outcry
- Electronic.
- Benefits of Commodity Exchange:
- Increase in agricultural production Stabilization in agricultural product pricing.
- Encourage exploration of solid minerals foreign exchange earnings Improved agricultural output and quality.
- Constraints to commodity trading: Inadequate supply;
- Poor storage
- Bad weather
- Middle men
- Ethical issues
- Inadequate knowledge of the working of the commodity exchange.
- Differentiate between commodities and stocks.
- Items traded:
- Tangible
- Intangible methods of pricing.