Commodity futures trading refer to the trading of futures contracts, which allows the contract owner the power to trade a commodity for a fixed rate in the future. Trading commodity futures is done in futures commodity trading markets. With the contracts being signed, the end result is the physical delivery of commodities, usually classified into agricultural (rice, sugar, for example), energy (natural gas, crude oil, for example), and metals and stones (gold, diamonds, for example).
When the trading contract expires, the buyer will make the payment and the seller will deliver the commodity. This differs with the procedure of financial futures contracts, where trading ends with a cash settlement, but no delivery of any commodity. Futures contract trading can be done through stock investing software that is connected to a commodity exchange or through a traditional method on a commodity exchange floor. Daily price movement of these commodities are specified and limited by the exchange.
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