A commodity is a basic good used in commerce that is interchangeable with other commodities of the same sort from a financial perspective.

Gold, meat, oil, lumber, and natural gas can all be categorized as commodities. In addition to the aforementioned commodities, we can also consider coffee, beans, rice, wheat, sugar, iron, copper, silver, platinum, and salt as examples of regularly traded goods.

Commodities are fundamental because they have been merely removed or taken from their natural condition and brought to a minimum quality for market sale. There is no additional value added by the manufacturer.

Although the quality of the commodity varies from producer to producer, the primary characteristics of the commodity remain relatively constant. Consequently, the market pricing of commodities with identical specifications became identical.

Futures contracts allow investors to buy and sell commodities on exchanges. Exchanges standardize the minimum quality and quantity of a commodity. Regardless of the producer, a barrel of oil is essentially the same product.

Conversely, when technology products are viewed as commodities, the board of trade should include a great deal more information. Generally, commodities are the raw resources used to produce more complicated things.