What Is A Commodity?

Patrick Curtis

Reviewed by

Patrick Curtis WSO Editorial Board

Expertise: Investment Banking | Private Equity

A commodity is any good that is identical (or very similar) from any producer, i.e. producers have to compete on price. They are usually used in production of other goods or services.

The most common types of commodity traded on financial markets are:

  • Oil
  • Wheat
  • Copper
  • Iron

Commodities are very susceptible to speculation and therefore are frequently volatile. The quantity of a commodity traded is standardized by the Chicago Board of Trade through contract amounts (i.e. one wheat contract is 5,000 bushels).

Related Terms

Return to Finance Dictionary

Patrick Curtis

Patrick Curtis is a member of WSO Editorial Board which helps ensure the accuracy of content across top articles on Wall Street Oasis. He has experience in investment banking at Rothschild and private equity at Tailwind Capital along with an MBA from the Wharton School of Business. He is also the founder and current CEO of Wall Street Oasis. This content was originally created by member WallStreetOasis.com and has evolved with the help of our mentors.