What is the consequence of having limited information about a commodity
Answers
Answer:
Information is intangible. Although it may be recorded in an object or onpaper, the tangible embodiment is not the information itself, nor does itdetermine who knows or can use it. Thus, thousands of people can "possess"one piece of information at the same time; possession, if one uses the termregarding information as a product, merely implies that a person knows ofand understands the data. For goods, by way of contrast, the idea ofpossession refers to physical possession and has various practical and legalconnotations with respect to controlling, protecting, and transferring theitem.Unlike goods, information can be used without being used up and can besold without being given up. One can sell and "deliver" information toanother but still retain the information in his possession and for his ownpersonal use. This is not, of course, the case in the sale of a tangible product.If one sells and delivers a television set to another, though he can purchase areplacement, he no longer possesses nor can he use the set that he sold.The distinctive nature of property rights in information shapes thecontract terms that are critical to commercializing an information product.To approximate the characteristics of the sale of a tangible item, a transfer ofinformation must entail restraints on the seller that are created by law or bysome form of an agreement. If one wishes to buy information that one alonewill own and control, one must exact from the seller an undertaking neither touse the information nor to convey it to another person. Even if one receivesthis assurance, not only may others obtain the same information from othersources, but there is a continuing risk that the seller will breach its agreement,leaving one only with a right to enforce one's property right of exclusivity.
Answer:
Broadly speaking, commodity trading is an activity which involves investing/trading in commodities. It is similar to stock trading but instead of buying and selling shares of companies, a trader buys and sells commodities. Commodities traded are often goods of value, consistent in quality and produced in large volumes by different suppliers such as wheat, coffee and sugar. Trading is affected by supply and demand, thus, limited supply causes a price increase while excess supply causes a price decrease. Therefore, the process of commodity trading is directly or indirectly affected by the demand and supply in the market.
Commodity trading is an investing strategy wherein goods are traded instead of stocks. Commodities can be traded on a spot level or on the futures exchanges as futures contracts. A futures contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price. A commodity future contract is a future contract which has a commodity as underlying asset.
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