Step 2: Understand how they’re traded 📈
There are two main ways to access the commodities market:
🔹 The spot market
Buy or sell the physical commodity for immediate delivery. Used mostly by producers, manufacturers or suppliers who need the goods now.
Example: A pipe-fitting business in Sydney needs copper for a project so they’d buy copper on the spot market.
🔹 The futures market
Trade contracts that commit the buyer and seller to exchange a certain amount of the commodity at a future date but at a price agreed today.
🧠 These are often speculative trades, meaning most people buy and sell the contract, not the commodity itself. No actual cattle or barrels of oil get delivered to your door.
✅ Futures are ideal for traders who want to speculate on price movements without storing physical goods.