A commodity is traditionally a bulk, generic good that can be produced by many competitors. This can include things as varied as diamonds, corn, wheat, or oil. The price quote on a commodity is the basis of futures trading and relates directly to the stock market. Commodities are usually traded in large quantities, and commodity quotes are an assessment for present and future trading.
A cash commodity refers to the actual physical good that is being held, sold, or purchased. A commodity quote is based upon the cash commodity as well as the current market. Cash commodities such as diamonds are held at a higher price because of their rarity. Many factors go into establishing a commodity quote.
Commodity quotes depend on the bidding and asking prices of the buyers and sellers. They're generally based on clear, established data. A potential seller may cite the expected return of the goods at hand, or the bidding or asking prices may be based off the last known price that was attained from the sale of the goods.
Prices are apt to fluctuate frequently, so commodity quotes change quite frequently as well. Prices depend on the market, season, and competition. Gas prices change rather often, for example, and the economy can influence the amount of luxuries a consumer will purchase. As the stock market rises and falls, so do commodity quotes.
Those wishing to buy commodities can profit from getting different quotes from competitors in the same commodity market. The market participant can look at commodity quotes to observe the highest bid and lowest asking price for each market holding the same commodity. This can encourage fierce competition.
Commodity quotes are usually given by commodity brokers, financial experts who specialize in the stock market. With the stock market being within reach of many everyday investors through online brokers and websites, however, more people than ever are becoming aware of market quotes. Commodity quotes are now even available instantly online or via smartphones and other mobile devices.
One thing that all commodity quotes have in common is their dependence on the current market. Stock markets such as the National Association of Securities Dealers Automated Quotations (NASDAQ) and others offer a full depth-of-book. It's through this that all of the current commodity quotes can then be displayed to interested parties. This empowers those in the marketplace by revealing the lowest prices available.