Options – Tools to speculate or hedge

Options can be used to create an exposure (and, thus, to speculate), but, alternatively, they can be applied as an instrument to hedge an exposure.

Commodification

‘Commoditisation’, or ‘commodification’, concerns a process of standardisation or creating fungibility.

The supply chain

The supply chain, or the value chain, concerns the system of organisations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer.

Classification of commodities

Commodities themselves can also be classified. As always, classifications can be made in various ways.

Classification of assets

In order to understand the place of the commodity markets, one needs to consider the bigger picture.

Classification of natural resources

Natural resources can be classified in a variety of ways. All of these categorisations are set out in this article.