Commodities are the hard assets that possess monetary utility. The popular commodities traded on commodity exchanges include are wheat, sugar, cotton, cocoa, crude oil and gold.
A commodity market is a place where one can buy, sell or trade various commodities at current or future date.
Commodities trading can be done by using futures contracts. A futures contract is simply an agreement between the buyer and seller to buy or sell a commodity at a particular price on a stipulated future date.
In India, a total of six exchanges operates from where commodities can be traded like a stock namely Multi Commodity Exchange (MCX), National Commodities and Derivatives Exchange (NCDEX), National Multi Commodity Exchange, Indian Commodity Exchange, ACE Derivatives Exchange and the Universal Commodity Exchange. These exchanges are regulated by SEBI.