Commodities Trading

() () () () () () () () () () () () () () () () () () () ()

 

Introduction

commodities

In general…

Commodities are raw materials or goods that are directly consumed or used for manufacturing a variety of products.

Usually traded in bulk, these commodities have 4 main classes:

  • Agricultural – includes wheat, coffee, sugar, rice, soybeans and cotton
  • Energy – Brent oil, crude oil, gasoline, natural gas, etc.
  • Metals – includes gold, silver, copper, platinum and aluminum
  • Livestock and meat – livestock cattle, etc.

 

Here’s a fact:

Since this market is traded globally, commodity prices are extremely volatile and depending on the circumstances, they rise and fall very fast.

The value of these products are largely based on dynamics of supply and demand and other influencing factors.

 

Picture this:

If there is an increase in demand but supplies aren’t able to keep up, this could drive the price of a commodity to go HIGHER as buyers are still purchasing them even with added costs.

On the other hand…

If there is an increase in supply but the demand is either the same or lower, then market value of a commodity tends to go LOWER as the owners of these commodities are willing sell them with more affordable prices.

 

Symbol Name Last Price Change % Change

 

Here’s the thing:

Commodities could be traded as spot contracts or as future contracts. The difference between the two is as follows:

  1. Spot contracts involve the immediate exchange upon settlement wherein the contract’s price is based on the asset’s current market value (the operative word is spot).
  2. Futures contacts on the other hand base the price on a specific value that buyers are willing to pay for the delivery of a particular quantity at a future date (hence the term futures).

 

Commodity Derivatives Trading

Did you know?

You can make a profit via commodity derivatives trading!

Derivatives are financial contacts or agreements among the buyers and the sellers to track the price of an underlying instrument.

And among the most popular form of derivative that is now being used by many online traders nowadays are CFDs or contracts for differences.

 

How does it work?

It is basically an agreement (hence the term contract) between the a trader (that’s YOU by the way) and a broker to exchange the difference in the value of a particular asset from the time the contract is open to the time that it is closed.

 

And here’s the interesting thing:

CFDs offer profit opportunities REGARDLESS if the market trend is going up or down.

Via CFD trading, you can go long (buy) if you speculate that the value of a commodity will rise, or go short (sell) if you think that it’s the other way around and that the market value of the specific commodity will fall.

 

By now you’ll have realized that trading CFDs is quite simple to do.

So what’s the next step?

You just need to open an account with a broker which offers a platform where you can trade commodity CFDs.

The most important thing here is for you to find a brokerage firm that is trusted and well-established to ensure the security of your capital.

 

And here’s the good news:

We’ve prepared a table of the most reputable and licensed brands where you can trade on a variety of commodities like crude oil, gold, coffee, wheat and other popular instruments.

 

So, what are you waiting for?

Sign-up now with any of these well-established brokers and grab the opportunity to learn and profit from the price movements of commodities!

 

Trusted and Regulated Brokers Where You Can Trade Commodity CFDs

Broker Features Rating Official Site
etoro logo

Read Review

  • Copy investment portfolios of top commodity traders
  • Practice with a free demo account
  • No overnight fees
  • Risk management tools

Min Deposit: $200

Regulation: CYSEC, FCA

 

96

Commodities Page

Open Account

75% of retail CFD accounts lose money.

 

plus500 logo

Read Review

  • Competitive spreads for commodities
  • Trading with as little as $100
  • Negative balance protection
  • Risk management tools
  • Fully regulated by the FCA, CySEC and ASIC

Min Deposit: $100

Regulation: FCA, ASIC, CySEC

 

95

Commodities Page

Open Account

76.4% of retail CFD accounts lose money.

 

avatrade logo

Read Review

  • Up to 1:200 leverage on commodities
  • Safe and secure trading environment
  • Trade for as little as $100
  • Live multilingual customer support during market hours
  • Regulated

Min Deposit: $100

Regulation: CBI, ASIC, FSC, FSA, FSB

 

94

Commodities Page

Open Account

 

xm.com logo

Read Review

  • Intuitive platform for trading commodities
  • Competitive spreads
  • Comprehensive education centre
  • User-friendly functions
  • Fully regulated by the CySEC and IFSC

Min Deposit: $200

Regulation: CySEC, IFSC

 

92

Commodities Page

Open Account

xm.com logo

Read Review

  • Commodities spreads for as low as 0.0
  • $5 minimum deposit
  • Comprehensive trading education
  • 24/5 live help
  • Unlimited demo account

Min Deposit: $5

Regulation: FCA, ASIC, CySEC

 

90

Commodities Page

Open Account

 

Trading Forex and CFDs involves significant risk of capital loss. You should consider whether you can afford to take the high risk of losing your money.