There is a number of commodity exchanges exist in the world, but when we think about only for top 10 commodity exchanges in the world than we get some filtered data. Commodity futures exchanges serve a very important role in establishing global benchmark prices for crucial commodities. Such as crude oil, gold, copper, and coffee, etc. The traders and speculators can earn profits out the fluctuations in the price levels of these commodities.
Traditionally the investors are indirectly participating in commodities through equity market mechanism. They seldom participate in commodity as a separate asset class. The commodity exchanges offer an opportunity to medium and small-sized investors to actively engage in this new asset class.
A commodity exchange is a legal entity that formulates rule and regulations for trading the standardized commodity contracts and related investment products of the financial industry. It is also known as a physical market place where such trading takes place. The two main commodity exchanges in US are the Chicago Mercantile Exchange (CME) group and New York Mercantile Exchange (NYMEX) which is also a part of CME. So CME group is the world’s leading and most diverse derivative market place handling roughly about 3 billion contracts annually.
Know more about: Basic of Commodity Market
In Europe, the most well known and major commodity exchange is the Intercontinental Exchange (ICE). Hike CME. ICE is also an electronic commodity exchange with no physical trading floors. The only physical trading exchange in Europe is London Metal Exchange (CME). This is the world center for the trading of industrial metals. More than 75% of all non-ferrous metal futures are traded here.
The major commodity exchanges can be listed here as under on the basis of their continent wise location.
- London Metal Exchange (LME) – Europe
It is a future exchange with a large market for options in metals. It is considered as a world’s major market for non-ferrous metals.
- Climax – Netherlands – Europe
This is an exchange for energy contracts and environmental commodities.
- Chicago Mercantile Exchange (CME) – USA
It is a derivative and commodity market. It offers a range of future and option contracts.
- New York Mercantile Exchange (NYMEX) – USA
It is the largest commodity futures exchange in the world in physical terms.
- Dubai Mercantile Exchange (DME) – ASIA
This is the first energy futures exchange for the Middle East The main trade is the Oman oil futures contract.
- Zhengzhou Commodity Exchange (ZCE) – ASIA
This is the futures exchange in commodities like agriculture and chemicals located in China
- Multi Commodity Exchange (MCX) – ASIA
This is an independent commodity exchange based in Mumbai.
- Tokyo Commodity Exchange (TOCOM) – ASIA
It is a nonprofit organization. It regulates option and future contracts of all commodities.
- Singapore Exchange Limited (SGX) – ASIA
It offers equity index futures and options, interest rates options.
- Australian Securities Exchange (ASX) – Australia
It is an electronic exchange for trading in various commodities.