A place or institution through which commodities are traded. Markets were originally places or buildings, where traders could come together, which facilitated comparisons of price and quality. Non-standardized commodities such as fish and fresh vegetables, which need to be physically inspected, are often still traded in such markets; in other cases names such as the ‘Corn Exchange’ commemorate former physical centres which have been replaced by systems of traders linked by telephones and computers. Commodity markets include both spot markets, where goods are traded for immediate delivery, and forward and futures markets, where prices are agreed in advance for delivery at various dates in the future. Such trading is facilitated by market conventions on the specification and quality of the goods traded, and systems for adjudicating disputes. These are clearly essential for spot trades where the buyers do not physically inspect what they are getting, and even forward and futures trading, where it is impossible to inspect crops which have not yet been grown or minerals which have not yet been mined.
|Reference: Oxford Press Dictonary of Economics, 5th edt.|