This document defines commodity derivatives and provides examples of their use. Commodity derivatives are contracts whose value is derived from underlying commodities like metals, agricultural products, and energy. The two main types are futures contracts, which obligate buyers and sellers to transact at a predetermined price on a future date, and options contracts, which give the holder the right but not obligation to buy or sell at a specified price by a certain date. Commodity derivatives help farmers, producers, and consumers manage risks from price fluctuations and provide investment opportunities for speculators.