Welcome to the Commodity ETF and Futures Trading Center, a special section of CommodityHQ.com dedicated to providing information on commodities for active traders. Trading commodities has been popular for a number of years, and as the financial world continues to expand, there are an increasing number of options available to gain access to your favorite commodity or asset class. This center is constantly updated to offer the most accurate and timely information for traders looking to make a play in the markets.
Trading Exchanges
There are a number of trading platforms available to investors, each offering a slew of different commodities and rules to go along with them. Below, we outline a number of popular platforms to help traders decide which will be best for their investing purposes:
- Chicago Mercantile Exchange (CME): A financial and commodity derivatives trading platform headquartered in Chicago. Originally founded in 1898 as the Chicago Butter and Egg Board, the CME has one of the largest options and futures line-up of any exchange in the world. The CME offers contracts of all kinds including agriculture, credit, economic events, equity index, FX, interest rates and other futures/options investments. The CME is owned and operates under the CME Group.
- Chicago Board of Trade (CBOT): Established in 1848, the CBOT ranks as the oldest futures/options trading exchange in the world. The exchange offers more than 50 different futures and option contracts for investors stretching across a number of asset classes. As of 2007, the CBOT operates as a subsidiary of the CME group.
- New York Mercantile Exchange (NYMEX): The NYMEX is the world’s largest physical commodity futures exchange, offering exposure to a wide variety of products. Commodity Exchange Inc. (COMEX) also operates as a division of the NYMEX and is best known for offering exposure to various metals contracts. The two divisions joined in late 2006, and were acquired by the CME Group in early 2008.
- London Metal Exchange (LME): Stationed in the United Kingdom, the LME is a major exchange that offers exposure to futures and options to a wide variety of base metals and other commodity products. Some of the metals traded include aluminum, copper, tin, nickel, zinc, lead, and many more. Though founded in 1877, the exchange can trace its roots all the way back to 1571, when the Royal Exchange in London was opened, only trading copper at its origins.
- Intercontinental Exchange Inc. (ICE): The Intercontinental Exchange is a U.S.-based company that operates futures and over-the-counter contracts via internet marketplaces. The company was originally focused on energy contracts but has widened its scope by offering exposure to a number of commodities including cocoa, cotton, sugar, iron ore, natural gas, crude products, and much more. The platform is much more focused on just a select few commodities and may be a good fit for traders looking to single out one or two commodities.
- Multi Commodity Exchange (MCX): The MCX is a private commodity exchange based in Mumbai, India. The company was founded in 2003 an ranks as one of the top ten commodity exchanges in the world. Traders can gain access to a number of the usual suspects like gold and silver, but also have the option to trade a number of commodities focused on the Indian economy like pepper, cashew kernel, yellow peas, and a number of other futures that would be difficult if not impossible to find inside U.S. borders.
Contract Specifications
When it comes time to trade individual contracts, it is extremely important that investors know how each commodity is quoted and what the individual contract represents. Below, we outline a number of the most popular commodity futures, and how their contracts are quoted to help investors know exactly what they are buying into:
| Contract | Size | Quotation | Platform |
|---|---|---|---|
| Copper (HG) | 25,000 pounds | U.S. Cents per pound | COMEX |
| Corn | 5,000 bushels (127 Metric Tons) | Cents per bushel | CBOT |
| Cotton | 50,000 pounds | U.S. Dollars per pound | NYMEX |
| Gold (GC) | 100 troy ounces | U.S. Dollars and Cents per troy ounce | COMEX |
| Heating Oil (HO) | 42,000 gallons | U.S. Dollars and Cents per gallon | NYMEX |
| Light Sweet Crude Oil (WTI) (CL) | 1,000 barrels | U.S. Dollars and Cents per barrel | NYMEX |
| Natural Gas (Henry Hub) (NG) | 10,000 million British thermal units (mmBtu) | U.S. dollars and cents per mmBtu | NYMEX |
| RBOB Gasoline (RT) | 42,000 gallons | U.S. dollars and cents per gallon | NYMEX |
| Silver (SI) | 5,000 troy ounces | U.S. Cents per troy ounce | COMEX |
| Sugar (No. 11) | 112,000 pounds | U.S. Dollars per pound | NYMEX |
Commodity Exchange Traded Products
ETFs hit the ground running in the past few years, as their granular exposure has democratized a number of asset classes that had one been virtually unreachable to the average investor. Commodity ETFs have been especially popular, as they give investors a new way to play their favorite commodities. Below, we show you the top ten commodity ETFs by assets under management and again by daily volume updated at the beginning of every month:
Top Commodity ETFs By Assets
| Ticker | ETF | Assets In Millions |
|---|---|---|
| GLD | SPDR Gold Trust | $32,802 |
| IAU | COMEX Gold Trust | $6,864 |
| SLV | Silver Trust | $6,410 |
| DBC | DB Commodity Index Tracking Fund | $5,694 |
| DJP | Dow Jones-UBS Commodity Index TR ETN | $1,682 |
| DBA | DB Agriculture Fund | $1,558 |
| SGOL | Physical Swiss Gold Shares | $1,110 |
| GSG | GSCI Commodity-Indexed Trust Fund | $1,095 |
| RJI | Rogers Intl Commodity ETN | $952 |
| PPLT | Physical Platinum Shares | $751 |
Top Ten Commodity ETFs By Volume
| Ticker | ETF | Average Daily Volume |
|---|---|---|
| DGAZ | 3x Inverse Natural Gas ETN | 19,779,338 |
| UNG | United States Natural Gas Fund LP | 15,014,754 |
| GLD | SPDR Gold Trust | 7,682,044 |
| SLV | Silver Trust | 7,245,989 |
| USO | United States Oil Fund | 3,220,232 |
| IAU | COMEX Gold Trust | 2,635,230 |
| DBC | DB Commodity Index Tracking Fund | 1,635,338 |
| UGAZ | 3x Long Natural Gas ETN | 1,421,494 |
| SCO | UltraShort DJ-UBS Crude Oil | 1,333,481 |
| DBA | DB Agriculture Fund | 806,003 |
Most Traded Contracts
When it comes to futures trading, liquidity is the name of the game. Depending on certain economic trends, a number of futures contracts can see high volumes in some months only to see little volume in the following trading sessions. For those looking for the most liquid or easily trade-able options, we outline the five heaviest contracts from the CME Group during April of 2014:
| Contract | Total Volume | Platform | Monthly Change |
|---|---|---|---|
| Crude Oil Phy | 11,466,590 | NYMEX | -2.0% |
| Corn | 6,996,160 | CBOT | 21.2% |
| Natural Gas Phy | 5,114,750 | NYMEX | 6.5% |
| Soybeans | 4,191,925 | CBOT | 16.0% |
| RBOB Phy | 3,316,923 | NYMEX | 29.4% |
