Commodities Definitions

Precious Metals

Precious metals are a group of metals that are highly resistant to corrosion. Precious metals include gold, silver, platinum and palladium. See also: Base Metals

Posted Price

An announced or advertised price indicating what a firm will pay for a commodity or the price at which the firm will sell it.

Corn-Hog Ratio

See Feed Ratio.

Pork Bellies

One of the major cuts of the hog carcass that, when cured, becomes bacon.

Core Principle

A provision of the Commodity Exchange Act with which a Contract Market, Derivatives Transaction Execution Facility, or

Contract Size

The actual amount of a commodity represented in a contract.

Contango

Market situation in which prices in succeeding delivery months are progressively higher than in the nearest delivery month. The discrepancy in prices is often a result of the costs of storing and insuring the underlying commodity. Opposite of backwardation.

Petrodollars

Refers to dollar deposits made by oil producing countries, such as OPEC members depositing their dollars in the European market.

Commodity Price Index

Index or average, which may be weighted, of selected commodity prices, intended to be representative of the markets in general or a specific subset of commodities, e.g., grains or livestock.

Commodity Pool Operator (CPO)

A person engaged in a business similar to an investment trust or a syndicate and who solicits or accepts funds, securities, or property for the purpose of trading commodity futures contracts or commodity options. The CPO either itself makes trading decisions on be