Commodities trading represents the buying and selling of set quantities of homogenous, or near-homogenous assets. E.g, Natural Gas, Crude Oil, Gold. Commodities trading is typically dominated by agricultural products, energy, and metal. Price movements in commodities are usually seen as bellwethers for the overall health of the industry that produces/consumes them.

For example, the price of copper is typically associated with the outlook of the construction industry and, by extension government-funded infrastructure projects. Similarly, gold typically maintains its value and tends to increase in price during times of uncertainty. Commodity prices can be impacted by factors such as adverse weather, seasonal availability, natural disasters, and other non-market factors typically found in other financial instruments.

Usually, trading on commodities can be speculative or for hedging purposes. Traders can trade commodities to express their views on certain industries or hedge their trading portfolio.