Commodity futures contracts can be bought and sold on the open market for which reason

Futures contracts are derivatives. Their price is derived from one or more underlying assets. Due to their nature as commodities, a buyer can agree to purchase at a predetermined price; and a seller can agree to sell that quantity at the agreed-upon price.

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jayilych4real jayilych4real · Answer 2 · 2022-04-08T10:12:23+02:00

The reason why commodity futures contracts can be bought and sold on the open market is that they are derivatives and can be bought and sold at a pre-agreed price.

What is a Contract?

This refers to the legally binding agreement which is used to broker something.

Hence, we can see that commodity futures contracts can be bought and sold on the open market for the reason that they are derivatives and they can be bought and sold at a pre-agreed price.