A commodity is basically a marketable item which satisfies wants or needs. Commodity is often used as inputs in production of other goods or services. A commodity trader is an individual or a firm who purchases and sells product and security future on exchange markets on behalf of their clients and charge them some amount of as commission. Traders are responsible in providing financial advice to the clients and also manage the accounts for them. They also handle financial instruments such as bonds, derivatives, stocks etc.
Clients trading commodity contracts are either hedger or speculator. Commodities traders must keep a keen eye on the market scenario relating to the product, investment pricing, trends as well as demand. Some of the commodity traders receive purchasing and selling instructions by meeting with other commodity traders and negotiate transactions. Others may also take clients over telephone and perform deals over computer. Unlike a stock trader, a commodity trader focuses only on investing in commodities. Commodity traders takes decision based on forecasted economic trends and/or arbitrage opportunity in the markets of commodity. Most common traded commodities are gold and oil. Commodity market also includes items such as wheat, sugar, cattle, cotton, silver and many other precious metals.