The commodity market is one of the best markets in which many people do trade and earn a profit on the daily basis. There are different types of commodities and many reasons that these are separated into various types. These separations are made for the purpose of making trade convenience for the investors. Almost every single type of commodities you will have to learn some basics to get started. Many investors often confused in which type of commodity they should invest to get a better return. If an investor is new and wants to make income through commodity trading, he should take suggestions from a sebi registered investment advisor. They are well educated and capable to advise you which market is best for you. When it comes to which one is suitable for you, there are different options to consider –
Soft: Commodities which are generally grown known as a soft commodity. Soft commodity includes coffee, cocoa, sugar, cotton and orange juice excluded livestock and future contract. Soft commodity refers to commodities that are grown instead of mined. It plays the major part in the future market.
Hard: Hard commodities are types of natural resources that need to be extracted. It includes gold, silver and other precious metal. Financial expert’s gold and silver tips are beneficial for the trader if they want a better result by trading in gold or silver market. Hard commodities are usually the ones that play an important role in the growth of a particular country or show their economic health. Because the production and supply of hard commodities can be determined fairly, they are used to measure global economic health.
Energies: This is a very active type of commodity in recent time because of its unique identity. It includes petroleum, natural gas, byproducts of petroleum, heating oil, crude oil and coal also. In this section of commodities, there is a minimum price set by the exchange.
Grains: This is the important and most traded commodity on the list of types of commodities. This includes wheat, corn, rice, oat and soybean. It also includes various other agricultural products. The Chicago Board of Trade is quite a bit involved with these type. This is usually sold as future contracts. This type of commodity has a minimum as well as a standard contract size.
Financials: The last but not the least, this is one of the commodity type known as financials contracts traded in the commodity section. This type is mentioned here because many traders also do trade in futures or options, instead of taking a position of actual goods.
So above are the various types of commodities traded in the market. It will depend on the trader in which they want to invest by analyzing their profit-making abilities and risk management capabilities.