Important Derivative Of Commodity Market

There are two kinds of important derivatives,first is a Commodity futures contract and second is a commodity option contract A futures contract is an agreement for buying or selling a commodity for a predefined delivery price at a specific future time. Futures are standardized contracts that are traded on , unified futures exchanges that ensure the performance of the contracts and thus remove the default risk. The commodity option holder has the right, but not the obligation,to buy(or sell) an exclusive quantity of a commodity at a as stipulated price on or before a specified date. The seller of the option writes the option in favor of the buyer (shareholder) who pays a certain premium to the seller as a price of the options. Best commodity tips will helps in defense the price risk and also provide investment opportunity to speculators who are willing to assume risk for a possible return.