Commodity trading products

What are commodity derivatives? Information you need to know about the Vietnamese commodity derivatives market

Commodity derivatives is a concept that is no longer strange in the world but is still quite new to many Vietnamese people. This article will help you learn about what commodity derivatives are? What information do you need to know about the commodity derivatives market in Vietnam to be able to invest effectively? 

What are commodity derivatives and commodity derivative products?

As mentioned above, the concept of commodity derivatives has appeared for a long time in the world, specifically in the 1960s, the earliest form of this concept appeared in England and the Netherlands. Since then, this concept has been continuously improved and is now widely known around the world, including Vietnam.

So what are commodity derivatives?

Commodity derivatives (also known as commodity derivatives) are the name of contracts in which the supplier and the buyer will conduct a transaction of a volume of goods at a specified price at the time stated in the contract. The transfer of goods and completion of the contract is a time in the future and in which factors such as volume of goods, price, standards, etc. will be specified at Vietnam's commodity exchanges.

Thus, we can immediately see a very prominent feature of commodity derivatives, which is that all activities are only recorded in the contract, and at the time of signing the contract, the real purchase and sale of goods has not yet occurred.

Commodity derivatives products in Vietnam

In fact, depending on the characteristics and strengths of each country, the commodity derivatives market will be different. For example, agricultural products will hardly be included in the commodity derivatives market of desert countries.

Vietnam is a country with many conditions to strongly develop the commodity derivatives industry. Specifically, the Vietnamese commodity derivatives market includes the following 4 main industry groups:

• Agricultural products: Agricultural products are one of Vietnam's main products in the world market, and this is also the industry group that is most traded in the commodity derivatives market today. Some of the main products in the commodity derivatives market in the agricultural product group include rice, wheat, soybeans, corn, soybean oil, etc.
• Industrial raw materials: Industrial raw materials are also a group of commodity derivatives that play an important role in Vietnam's economy. Some typical products in the industrial raw materials group of our country can be mentioned as coffee (Arabica and Robusta), crude palm oil, cocoa, cotton, sugar, rubber, etc.
• Energy group: With its geographical location including forests, plains and seas, Vietnam's mining and energy industry is currently developing very well, and this is also the commodity derivatives market group with the fastest growth rate in recent times. Some typical products in the energy group include crude oil, natural gas, coal, etc.
• Metal group: The metal group is also a commodity group that plays an important role in Vietnam's commodity derivatives market and has made a significant contribution to the overall economy of the country. Some typical products in the metal group in the commodity derivatives market include silver, platinum, copper, iron ore, tin, lead, nickel, etc.

Common commodity derivatives contracts in our country

As mentioned above, commodity derivatives transactions are conducted through contracts between suppliers and buyers, and this transaction will occur at a future time. Currently, commodity derivatives transactions in Vietnam are often conducted based on the following two common types of contracts:

• Futures contract: This is a fairly common type of contract for commodity derivatives trading in our country. Simply put, when discussing the contract, the seller and the buyer will finalize the price at the time of signing the contract, but the delivery time is a specific time in the future.
• Option contract: Option contracts are also a popular type of contract in commodity derivatives trading in Vietnam. This type of contract allows the buyer to have the right to buy/sell goods in the future at a price specified at the time of signing the contract. This type of contract protects the buyer's option rights, so the buyer will have to pay a certain fee to buy this right.

In addition to the two common types of contracts mentioned above, there are also futures contracts and swap contracts that are often used in commodity derivatives trading. You can click on each type to learn more.

How to trade commodity derivatives in Vietnam

If you want to conduct commodity derivatives transactions in Vietnam, we will usually do it in the following 2 ways:

• Direct trading: This is a relatively popular trading method in the early days when commodity derivatives trading was just developing in Vietnam. This method is simply that the buyer finds information about the seller listed on the mass media and then contacts them to work directly to be able to sign commodity derivatives contracts.
• Trading through third-party applications: This is currently a popular method and is chosen by many people when signing commodity derivative contracts. Signing contracts through third-party applications helps buyers to find information and close transactions anywhere, anytime with just a device with an internet connection, very simple and fast.

Efficient commodity derivatives trading with AnfinX application

AnfinX is a multi-utility financial application built with the aim of providing the most effective support for Vietnamese users' stock transactions, helping to provide all the necessary tools and services for everyone's investment and financial development journey.

When trading commodity derivatives on AnfinX, investors will be able to update information about the commodity market quickly and accurately, thereby making the most effective investment decisions. In addition, investors also receive 1:1 advice from experts in the financial field to help minimize risks.

If you are interested in commodity derivatives trading in particular and online investment in general, you can join AnfinX to help make your work simpler and achieve the best results today.