Futures contracts are agreements to buy or sell a standardized asset at a specific future time

Futures contracts—which are agreements to buy or sell a standardized asset at a specific future time—are the primary way commodities are bought and sold.

Commodity trading is regulated by the CFTC to mitigate fraud and risk

Established in 1974, the CFTC regulates these markets (including swaps, futures, and certain types of options) to protect market participants from fraud, ensure fair trading conditions, and generally reduce financial risk.

How exchanges like the Chicago Mercantile act as trading referees

Chicago's Mercantile Exchange emphasizes futures contracts on commodities. This podcast episode breaks down how exchanges actually work, make money, and streamline the market.

Commodity traders are most commonly 'hedgers' or 'speculators'

While hedgers often produce and consume physical commodities (like corn, copper, or natural gas) and use the markets to manage the price risk for those commodities, speculators provide liquidity by betting on commodity price changes.

The 'commodities' investment category includes livestock, oil, wheat, and more

Commodities traders look at all of these things as assets, placing short-, medium-, and long-term wagers on how much each is really worth. Commodities are valuable in part due to how essential they are in creating most of the world's marketable goods.

Retail investors can get exposure to commodities via various financial vehicles

While retail investors likely won't go out and purchase a bushel of commodity wheat to trade, they can get exposure to the commodities market via commodity ETFs sold on traditional stock exchanges like the NYSE and Nasdaq and other financial vehicles. There are benefits to adding commodities to a retail investor portfolio (such as a hedge against inflation and a typically low correlation with more traditional asset prices), experts caution that commodities are usually volatile investments.

Prediction markets convinced regulators they're not gambling, but exchanging commodity futures contracts

Kalshi built a legal case that argues its yes/no bets on real-world events are futures contracts, and the relevant regulator—the Commodity Futures Trading Commission—agreed in 2020. Many states are now suing major prediction markets, arguing this legal case is faulty and obscures the true substance of the business: gambling.

Commodities have to meet specific specifications to be classified as commodities

In the financial sense of the term, commodities must be uniform, interchangeable, and deliverable to meet the classification. That's partly why a crop grown in your backyard might not qualify as a commodity crop.

Spot markets are where commodities intended for relatively immediate delivery are traded

Spot markets are where physical securities are exchanged for cash. Also known as cash markets or physical markets, the trades are relatively immediate—both parties agree to an immediate transfer. Currencies and securities can also be traded on spot markets.

Over-the-counter markets are used to bypass traditional exchanges while trading

Commodities are regularly traded via OTC markets so that buyers and sellers can bypass central exchanges and negotiate terms more directly. Before the advent of formal exchanges, most assets were traded OTC.

It's tough to measure just how much the global commodities market is worth

That's partly because of all the different ways and places commodities are traded—such as futures exchanges, spot markets, and over-the-counter deals. Additionally, the same commodity can be traded multiple times in different markets, making it easy to risk duplicating trade values in calculations.

Stock options give investors the right to buy or sell a stock at an agreed-upon price and date

There are two types of options: calls, which are bets that a stock will rise (or not rise past a certain point), and puts, bets that a stock will fall (or not fall past a specific level). While stock options give investors the right to do these trades, they do not obligate buyers to follow through with them—sellers, on the other hand, must perform the option if it is exercised

The prices on prediction markets reflect how the collective forecasts future outcomes.

Contract prices on prediction markets are generally interpreted as implied probabilities

For example, if a contract trading is at $0.65, that could be read as the market assigning a 65% probability to that event occurring. The most common format for prediction markets is winner-take-all: The contract settles at $1 if the event occurs, or $0 if it doesn't.

Call options 101

A call option is a contract that gives the option buyer the right to buy an underlying asset at a specified price within a specific time period. A call buyer profits when the underlying asset increases in price. Learn more about the financial contract and how you can use it in this article.

Commodity traders are the most powerful people you've never heard of

Just beneath the surface of the global economy is a hidden layer of dealmakers for whom war, chaos, and sanctions can be a great business opportunity—they're called commodity traders. Their power partly stems from the fact that commodities are essentially the building blocks of the economy at large.

ETFs and mutual funds both pool money into a basket of investments—but the key difference between them is that mutual funds trade just once per day after the market closes, while ETFs trade like stocks throughout the day at fluctuating prices.

A margin call is a way for traders to pay off debts by selling a security before they may be ready to do so.

See how much key commodities are trading for in real time

This tracker shows the current price of common commodities such as crude oil, lumber, nickel, and many more, as well as how much these prices have fluctuated over the past day, year, week, and month.

What are repurchasing agreements?

Repurchasing agreements are short-term trade agreements in which a dealer sells securities and agrees to repurchase them at a higher price soon after (often within 1 to 2 days). This gives dealers quick access to cash and allows the purchasing party, often the Federal Reserve, to control liquidity in securities. This can be used to alter the money supply, which is a key element in combating deflation.

What are smart contracts?

Smart contracts are potentially one of the most useful tools associated with blockchain, and they can enable the transfer of everything from Bitcoin and fiat currency to goods transported around the world. Here’s what they do and why they’re likely to gain traction.

There's a grading room on the eighth floor of the New York Stock Exchange where experts loudly slurp coffee and then spit it out to test its quality.

Shorting is a high-risk and expensive investment strategy that hedge funds specialize in

Most investors buy stocks with the expectation that those stocks will be worth more tomorrow than they are today. Short selling, known as “shorting,” a stock is the opposite: The investor is betting the stock will drop in value.

The CME FedWatch Tool predicts the likelihood of future rate changes

It's based on federal fund futures contract prices. At a Fed meeting in July 2024, for instance, Chair Jerome Powell once again decided not to lower rates, though he said cuts could be on the table in September.

'The Great Onion Corner:' Hear how short-selling onions ended with a ban on onion futures

In the early 1950s, onion farmer and produce trader Vince Kosuga cornered the onion market, resulting in a 1958 ban on onion futures from Congress. After stockpiling onions and buying onion futures, Kosuga then began shorting them. Then, he released his accumulated surplus of onions, driving the price down to essentially zero, and cashed in his short positions.

How key commodities have performed since 2019, visualized

Due in part to factors such as the COVID-19 pandemic and global supply chain issues, commodities experienced significant volatility from 2019 to 2025. For instance, coffee bean prices saw major swings in recent years due to climate challenges in countries including Brazil and Vietnam.

What is after-hours trading?

While both the New York Stock Exchange and the Nasdaq open at 9:30 am ET and close at 4 pm ET, some trading is allowed after that. After-hours trading was once only open to institutional investors and people with particularly high net worths. Now, with the advent of computers, anyone can trade stocks anywhere online, and those regulations have broadened.

The bond market is where bonds and other debt securities are traded

Bonds are fixed-income investments allowing individuals to lend a specific amount of money to a large entity, like a government or corporation, for a set amount of time in return for interest paid out over the life of the loan. The bond market is widely considered a key economic barometer.

Leveraged ETFs made headlines in 2026 as a boom in single-stock leveraged products tied to AI companies drove volatility and record retail demand.

Use a prediction market profit or loss calculator

In order to calculate how much someone would make from a specific trade on a prediction market, this calculator asks for the purchase price of a given "yes" or "no" prediction, the number of contracts the trader plans to purchase, and more.

The different types of stablecoins include algorithmic stablecoins

In addition to fiat-backed stablecoins, commodity-backed stablecoins, and cryptocurrency-backed stablecoins, algorithmic stablecoins use smart contract-based mechanisms to maintain a stable value by responding to supply and demand.

The stock market, explained in 3 minutes

The stock market consists of a set of exchanges and other venues where shares of public companies are bought and sold. The Nasdaq and the New York Stock Exchange are two of the most well-known exchanges in the US, while major exchanges also operate around the world, including in Tokyo, Shanghai, London, and São Paulo.

Investors need a 'margin account' to short sell stock

Margin accounts are leveraged accounts through brokerage firms that allow investors to make trades without the full amount of capital on hand. Similar to a secured loan, margin accounts often require some form of collateral and typically have a cap on how much investors can borrow. However, trading with a margin account is much riskier than a traditional investment account. Fees and charged interest are due on margin accounts, regardless of trade performance, meaning it's possible for investors to lose more money than just their initial investment.

Prediction markets and sports betting are not forms of investing, despite how some fans portray them.

The term 'securities' refers to different types of investments, such as stocks or bonds.

Certificates of deposit are investment vehicles that earn interest on a fixed sum of money over a set term

CDs come in varying term lengths, from three- or six-month commitments to decadelong terms. Typically, the longer the term, the higher the interest rate.

A 'position' in financial markets refers to the amount of a security or asset that an investor owns or sells short

A "long" position gains from an increase in a security's price, whereas a "short" position profits from a price drop. This article includes a detailed explanation of the term "position" as it relates to investing and financial markets.

Index funds are typically structured as either mutual funds or exchange-traded funds, but investors can manually recreate an index through 'direct indexing.'

The SEC recently approved bitcoin ETFs in landmark investing decision

In January 2024, the US Securities and Exchange Commission made history when it decided to allow fund issuers to launch bitcoin ETFs. This new class of exchange-traded fund tracks spot bitcoin prices, essentially allowing investors to hold bitcoin without actually having to buy the crypto.

Tranches slice financial products into segments

Specifically, tranches are slices of securities (think: bonds or mortgages) divided by risk and characteristics to attract different investors with a variety of risk tolerances.

Fannie Mae and Freddie Mac are federal housing enterprises originally established to offer affordable housing loans to buyers

The Federal National Mortgage Association is commonly called Fannie Mae, and the Federal Home Loan Mortgage Corporation is called Freddie Mac. Since Fannie Mae’s creation in 1938 and Freddie Mac’s in 1970, they’ve become staples of the housing market.

Mortgages are loans used to buy property

A mortgage is a loan used to buy property, like a house. Borrowers typically put down a percentage of the cost of the home, and the amount left over is financed through a lender, like a bank.

Annuities come in different types, such as immediate annuities and deferred annuities

Immediate annuities have no accumulation phase and go straight to the annuitization phase, whereas deferred annuities are set up to begin paying out at an agreed-upon date in the future. Annuities can also differ in how they accumulate value (fixed and variable annuities).

There are three main ways to start investing in the bond market

Invest in the boind market through a brokerage, mutual fund or ETF, or the US government. Each has different steps and terms to follow, from starting rates to opening specific accounts. Some bonds are relatively easy to purchase, but the process differs depending on the type of bond you want.

BlackRock says investor demand and improvements in underlying fund technology have supercharged ETF availability in 2025

Investors are likely most familiar with ETFs that invest in an index or other grouping of stocks. However, BlackRock breaks down a wide variety of options, including commodity ETFs, currency ETFs, and bond ETFs.

Retail investors are individuals who trade stock for themselves

Institutional investors, on the other hand, are investing for someone else. There are big differences between the two, one being that institutional investors can be granted certain special treatment (like being able to purchase IPOs right away).

Open-end and closed-end mutual funds differ in how they create and distribute shares.

Annuities are financial products typically used by retirees looking for guaranteed income streams.

Retail investors are average joes, while institutional investors often move billions of dollars a day

Retail investors often trade 100 shares at a time, while institutional investors trade 10,000 or more. The biggest difference is that, unlike retail investors, institutional investors are professionals who are trading someone else’s money.

Smart contracts are the foundational technology behind NFTs

Smart contracts use “if that, then this” logic to track the ownership of NFTs and record when they are bought and sold on the blockchain.