What's What in the Financial Services Industry

Commodity

Definition: as defined by the Options Industry Council, a commodity is a physical substance, such as food, grains, and metals, which is interchangeable with another product of the same type, and which investors buy or sell, usually through futures contracts.

Example: oil, wheat

Regulated by: commodities and commodities brokers are regulated on the federal level by the Commodity Futures Trading Commission (CFTC); on the state level, commodities are regulated by the Indiana Securities Division. Commodities brokers do not register with the Indiana Securities Division but the division does enforce the Indiana Commodities Act. Brokers are in violation of that act if they are not registered with the CFTC.

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