WHAT ARE THE BENEFITS OF TRADING ON A COMMODITY EXCHANGE?
a. Price discovery Through free competition between many potential buyers and sellers, the best price for a commodity is determined. b. Price risk management The market enables producers and users of commodities to pass the price risks inherent in their businesses to traders who are willing to assume these risks in anticipation of making profit. c. Dissemination of market information Since COMEX are national or worldwide in scope, they provide information needed by the users of such markets. d. Effective protection of market participants e. Rules and regulations that must be respected by all participants. f. Clearinghouse that ensures all transactions are settled as at when due.
