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Commodity

A uniform good with commonly accepted quality parameters, traded through standardised contracts.

How to read the number

Uniformity is what makes exchange trading possible: the buyer does not care whose cargo arrives as long as it meets the specification.

When the metric lies

The standard does not describe everything. A real cargo differs in quality and in delivery point, and the difference is settled by premiums that the exchange quotation never shows.

Also known as: physical commodity

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