Commodities are most often used as inputs in the production of other goods or services. A commodity, thus, refers to a raw material used to manufacture finished goods. The quality of a given commodity may differ slightly, but ibis essentially uniform across producers. When they are traded on an exchange, commodities must also meet specified minimum standards, also known as a basis grade.

* The sale and purchase of commodities are usually carried out through futures contracts on exchanges that standardize the quantity and minimum qualty of the commodity being traded.

* There are two types of commodities traders. The first are buyers and producers of commodities that Use commiodity futures contracts forthe hedging purposes for which they were originally intended. These traders make or take delivery of the actual commodity when the futures contractexpires. The second type of commodities traders aim to profit from the volatile price movements.

* Copper can also be traded through contracts-+For-difference (SFDs), a derwvative instrument. Copper GFDs allow traders to speculate on the price of copper without owning bullions, ETFs, futures, options, or mining shares.

Copper is the third most used industrial metal after iron and aluminum. Unlike gold and silver, copper is not used as a store of value, therefore it is less impacted by speculative price movements. In fact, ts price shows significant correlation
with global GDP, as tt is highly impacted by manufacturing and industrial growth.

Copper’s closest industrial substitute is aluminum. Approximately 60% as conductive as copper, aluminum costs and weighs only one-third as much. But the comparatively poor conductivity of aluminum is an important drawbackin several
practical applications.