Increase in the volume purchased and sold futures trade contracts also gave rise for the need to have a central place where this activity will be carried out. It was also desirable to have an eye on the trade transaction, that is all seen and heard to be able to participate in price competition and to eliminate secret shops. And so was born the Commodity Exchange, which is the world’s few. In the U.S., the largest commodity trade exchanges in Chicago, New York, Kansas City, Minneapolis and Philadelphia. The largest commodity exchange in the world is the Chicago Board of Trade (Chicago Board of Trade).
Commodity exchanges tend to specialize for example, stock exchange, which deals with corn futures, does not need to futures trading in silver or heating oil. This trade concept is different than the stock markets, where the mix of different stocks traded on fewer stock exchanges. Some commodities are traded worldwide (gold, silver, oil) and satellite communications and high speed computers allow to be known at the exact minute pricing information anywhere on other exchanges. The prices of the same commodity traded on multiple exchanges are not always exactly the same. For example, the gold price in Hong Kong, London and New York differ slightly, and any substantial difference can affect trader’s decisions whether to enter or exit the trade market with gold, or stand aside and watch the whole event.
Some global trade markets are so huge that the sudden drops or pump up prices on one exchange to another may not even pay attention at the end of trading day prices on all stock exchanges as usual like. Traders often watch the trade activity on other exchanges. Sudden price fluctuations can occur on any stock exchange and the reasons for price movements can be a mixture of different events and not events, because the reasons for price fluctuations can not be determined. Nothing will stop some nervous traders from buying as information or information and, if there is enough, the sudden and rapid action Gregarious instinct may cause a temporary rapid decrease or increase prices.
Decision traders may be based on weather forecasts, moon phases, political upheavals, reports on inflation, the gossip fire, world news, everybody something, or none of the above. Nobody said that it is simple trade.
The stock is moving several entities with different interests:
- The official observers representing the public on the stock exchanges and broker and monitor the activity of others
- Clearing trade banks are guarded by their brokerage firm
- Brokerage firms guarding the brokers
- Brokers police accounts of traders
- Traders monitor movements of their money