DEFINITION of 'Exempt Commodity'
Any commodity other than an excluded or agricultural commodity. Transactions in an exempt commodity may only be between eligible contract participants or commercial entities, and cannot be executed on a trading facility.
BREAKING DOWN 'Exempt Commodity'
This serves as a residual term for any of the commodities not specified in the Commodities Exchange Act (CEA). These commodities are exempt from the rules outlined in the CEA; however, these transactions are still subject to the prohibitions against fraud and price manipulation. Exempt commodities include energy and metals.