What is a primary characteristic of commodities trading?

Commodities trading is distinct in that it encompasses not only the trading of physical goods like oil, gold, and agricultural products but also financial derivatives such as futures and options. This characteristic allows traders to engage in more complex strategies that can involve speculation on price movements, hedging against risks, and accessing different markets.

The ability to trade financial derivatives is crucial because these instruments enable traders to manage their exposure to price fluctuations without necessarily needing to hold the physical commodity itself. This expands the participation in the commodity markets to include investors and institutions that may not be involved in the physical trading of goods but are interested in speculating on price trends or hedging their portfolios.

The other options illustrate aspects that are either too narrow or misleading regarding the broader nature of commodities trading. For instance, while regulation plays a role in the trading environment, it does not define the essence of commodities trading as clearly as the inclusion of financial derivatives does. Similarly, the concept of unlimited leverage is skewed; while leverage can amplify potential gains, it is not uniformly available to all traders and comes with significant risks. Thus, the correct answer underscores the central role that financial derivatives play in the commodities market.