The Meaning and Definition of Tradable
We often hear terms like ‘tradable’ in the trading world. However, have you ever wondered what tradable really is and what it means?
Tradable is something that you can trade. Tradable is used in relation to terms such as ‘tradable commodities’ in order to express commodities that can be traded across countries/boundaries.
Essentially, to understand what tradable really is, we first need to understand what it means and how it is defined.
What Is Tradable?
“To trade”, is to buy, sell or exchange currency, bonds, stocks or other assets. It is the purchase or sale, a business transaction or deal, of a given asset.
On the other hand, the word ‘tradable‘ refers to something that can be traded or exchanged; either for another good of the same type or in exchange of money or another commodity.
Tradable, therefore, is something that you can exchange.
The word tradable also refers to those “commodities that can be fully traded or are tradable at the stock exchange’.
Similarly, ‘tradables’ are shares or investments that you can buy or sell.
The meaning of ‘trade’, ‘trading’ and ‘tradable’ all go hand in hand.
So, to answer ‘what is tradable’, we can also say that most trading terms are used interchangeably.
The word tradable is used in many different instances.
When we talk about ‘what is tradable’, we can talk about tradable commodities. Tradable commodities comprise of certain basic goods. These goods are used to explain interchangeable exchanges with other goods but of the same type.
The tradable commoditieswe talk about here are evaluated by analysts and economists as ‘inputs that can be used in the production of other services and goods’.
If we are talking about tradable commodities, the four basic groups involved are:
Many Definitions And Meanings Of Tradable
There is not one but manydefinitions of the word ‘tradable’.
However, if we use it in the sense of commodities, stocks, forex or any other asset, we can say that ‘tradable’ is a term used to define something that can be exchanged, either for money or for another commodity’.
While some commodities are tradable, others are non-tradable.
Non-tradable goods include water supply, electricity, public services, construction, local transport, etc.
Tradable commodities share certain basic characteristics. These include:
- They comprise of basic goods
- Goods used in commerce are mostly considered tradable
- They are inter-changeable with other types of goods of the same type
- Tradable commodities are considered as important/viable inputs in the production process.
When it comes to tradable commodities, there are some important things you must note.
Firstly, ‘Tradable’ is an act performed via future contracts. It is performed on different exchanges. These contracts are used to standardise the minimum quality and quantity of the products that are to be traded.
On the other hand, as I talked about non-tradable goods; non-tradable goods are non-tradable because of their nature or demand in the respective country.
Tradable is a term used to describe something that can be traded or exchanged.
Oil, for instance, is a tradable commodity. Stocks are tradable and so is foreign exchange. Tradable, is something that you can buy or sell.
Trading is all about making the right moves and gains. However, losses are part of the process too
‘Tradable’, therefore, goes hand in hand with other terms of trading such as trades or trading per se.
If you want to learn more about trading, commodities, the latest news and updates, stay tuned with us at TheTradable.