A commodity exchange is a marketplace where various raw materials and primary products, known as commodities, are bought and sold. These commodities can include items like gold, oil, wheat, and coffee. Traders participate in these exchanges to speculate on price changes or to hedge against risks associated with price fluctuations. Commodity exchanges facilitate the trading of standardized contracts, which specify the quantity and quality of the commodity. This helps ensure transparency and fairness in transactions. Major global commodity exchanges include the Chicago Mercantile Exchange and the London Metal Exchange, where participants can trade both physical commodities and futures contracts.