Commodity Index


DEFINITION of 'Commodity Index'

An index that tracks a basket of commodities to measure their performance. These indexes are often traded on exchanges, allowing investors to gain easier access to commodities without having to enter the futures market. The value of these indexes fluctuates based on their underlying commodities, and this value can be traded on an exchange in much the same way as stock index futures.

BREAKING DOWN 'Commodity Index'

There is a wide range of indexes on the market, each of them varying by their components. The Reuters/Jefferies CRB Index, which is traded on the NYBOT, comprises 19 different types of commodities ranging from aluminum to wheat. They also vary in the way they are weighted; some indexes, for instance, are equally weighted and others have a predetermined, fixed weighting scheme.

  1. Commodity

    1. A basic good used in commerce that is interchangeable with ...
  2. Chicago Board Of Trade - CBOT

    A commodity exchange established in 1848 that today trades in ...
  3. New York Board Of Trade - NYBOT

    A commodities exchange in New York that trades futures and options ...
  4. Goldman Sachs Commodity Index - ...

    A composite index of commodity sector returns which represents ...
  5. Futures

    A financial contract obligating the buyer to purchase an asset ...
  6. Commodity Futures Trading Commission ...

    An independent U.S. federal agency established by the Commodity ...
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  2. Can mutual funds invest in options and futures?

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  3. Where do penny stocks trade?

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  4. Where can I buy penny stocks?

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  5. How do futures contracts roll over?

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