Commodities are naturally occurring goods or materials that play a key role in many aspects of people’s daily life and power the world economy. Because of their constantly-changing prizes, commodities offer some unique opportunities for traders but getting the necessary knowledge in order to make a profit does not happen overnight.
Normally, traders tend to play the commodities market when they are looking for a way to diversify their portfolios beyond traditional securities, and to achieve this, they add different asset classes.
It is worth mentioning, however, that trading commodities might carry more risk when compared to trading conventional assets like stocks and bonds because there are lots of factors that have an effect on supply and demand. Human-made and natural disasters, epidemics, and weather patterns are only some of the uncertainties that can affect the market.
Formerly, commodities were mainly preferred by seasoned traders because getting exposure to the market required lots of time, expertise, and money. Today, the market is far more sophisticated, and there are many more opportunities to participate in the commodities market. The list of tradable commodities is much longer, and there are exchanges scattered almost all over the globe that are available around the clock.
How Commodity Trading Works for Traders and Brokers
Commodities fall into four main categories, including livestock, energy, metals, and agricultural products. As opposed to bonds and stocks that only exist as financial contracts, commodities are physical raw materials that are bought, sold, and traded in markets. In simple terms, while trading commodities, traders attempt to make the most out of the supply and demand trends.
Commodities have great importance in daily life and can be divided based on their purposes or grouped together as soft and hard ones. Hard commodities can be defined as natural resources that must be mined or extracted and these include oil, copper, natural gas, and gold. Soft commodities are grown and harvested, and some such are sugar, wheat, coffee, corn, and cocoa, among others.
- Commodity trading is all about exchanging different assets, which, on most occasions, is done through futures contracts. Their price is based on the price of the underlying physical commodity, and by selling or buying these contracts, traders will focus on the price of the chosen commodity at a specific time in the future. Thus, if traders think that the price of their commodity of choice will fall, they will go short or sell the futures. When they think that prices will go up, traders will go long, which is to say that they will buy futures.
- Many traders that are interested in entering the market prefer to achieve this through stocks of companies that are in some way related to the commodity of their choice. These might be mining companies, refineries, drilling companies, or smelters, among others. The main reason why traders tend to pick commodity stocks over futures is that they are less susceptible to large price swings. Another advantage of investing in stocks when traders are looking to enter the market is that typically, the information about companies’ financial situation is readily available. Still, what traders should consider is that stock prices are also influenced by factors that have nothing to do with the commodity they have decided to trade.
- When making physical commodities purchases traders will get possession of the
- Commodities EFTs and ETNs – exchange-traded funds and notes can also be based on commodities, and they put together money from investors into a larger portfolio. In this way, by making a small investment, traders will track the price of the commodity they prefer or even a basket of commodities. Without a doubt, these are low-cost opportunities, and the investment traders will be required to make will be considerably smaller in comparison with building the portfolio on your own. Yet, what traders should remember is that they might not always be able to perfectly keep up with the price of their chosen commodity.
- Trading commodities with CFDs – trading commodities via CFDs is yet another efficient way to get exposure to the market. Many modern-day commodities investors prefer CFDs because of the higher leverage, thanks to which they can get greater exposure to the market, using less capital. In spite of the increased profit potential, traders should not forget that the loss potential will go up as well. The contracts for difference are derivatives products that make it possible for traders to speculate on the price of their commodity of choice without taking actual ownership of it.
- Commodity pools and managed futures have a lot in common with mutual funds, and they are private funds that can be invested in commodities. Unlike mutual funds, commodities pools and managed funds are not publicly traded. In spite of the fact that the potential profit can be quite handsome, traders should not overlook the higher management costs.
Why Commodities Prices Change
The commodities market is a highly volatile one, and for this reason, traders should constantly adjust the strategies they are using. Many traders tend to turn to the market when they are looking for new opportunities, but the factors that drive commodity prices are what many of them tend to overlook.
There are several reasons why the commodities market is so highly volatile, and as we mentioned already, supply and demand are the first factors to consider. Economic growth, government policies, geopolitical situations, and currency movements might also be among the reasons why commodity prices move.
Weather patterns also have a decisive role when determining commodity prices, especially when soft commodities are concerned. Storage costs and transportation also play a part when shaping commodity prices.
Commodity Trading Brokers
These days, there is a massive variety of commodity trading brokers, and this might make it a stretch for traders to tell the worthwhile platform apart from the rest of the brokers. In the first place, traders can judge the quality of the broker from the variety of commodities the company has added to its portfolio. Additionally, traders should make sure that they are dealing with an authorized company that adheres to all operational guidelines and is exceptionally strict when it comes to the protection of its users. The pricing, available platform, the accepted funding and withdrawal methods, as well as the quality of customer care are also among the features traders should pay more attention to.
- 1. FBSMin Deposit$1, $10, or $100 depending on the account typeFees
- No deposit fees
- $1 fee for withdrawals executed through Visa
- 2% for withdrawals via Neteller
- 1% for cashouts via Skrill
- 0.50% for withdrawals via Perfect Money
- 2.5% for STICPAY
- No commission for standard accounts
- 0,05% for opening and 0,05% for closing positions for crypto accounts
- Starts from 0.00 for energies; typical spread between 5 and 10
- Typical spread for metals between 5 and 23
- 10:1 for energies
- 20:1 or 10:1 for metals
Risk warning: ᏟᖴᎠs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.5% of retail investor accounts lose money when trading ᏟᖴᎠs with this provider. You should consider whether you understand how ᏟᖴᎠs work and whether you can afford to take the high risk of losing your money.
- 100:1 or 333:1 for metals
- 200:1 for energies
FBS is a broker that is cut out for traders who want to play their preferred markets in a safe, effective, and simple way. Judging from the multiple awards the broker has collected since 2009, FBS undoubtedly shows excellence in the services it offers.
To command the attention of newbies and professional traders, FBS allows its users to select from three types of real-money accounts, including standard, cent, and crypto. All of them have demo versions, thus ensuring that traders will have an easy time picking the account type that suits them most.
Trading commodities is possible on some of the most convenient, reliable, and functional trading platforms, including MetaTrader4 and MetaTrader5. The proprietary platform FBS Trader offers more efficiency and promises to optimize the trading speed while you are out and about. While trading commodities on the move, traders will be offered real-time stats and can edit their order and account settings like a charm, thanks to the user-friendly interface.
Thanks to the all-in-one trading platforms, FBS users can get exposure to a slew of markets, including stocks, Forex, energy, metals, indices, and cryptocurrencies, among others. The broker has been operating for quite some time, and traders can be sure that they will be offered a stable trading environment at all times. FBS is regulated by the Cyprus Securities and Exchange Commission, IFSC, and ASIC, among others.
- 2. Markets.comMin Deposit$100FeesNo deposit and withdrawal feesCommissionsNo commissionSpreadSpreads from 0.3 on goldLeverage EU
- 20:1 for gold and silver
- 10:1 for platinum, palladium, and copper
- 10:1 for natural gas, Brent oil, heating oil, coffee, sugar, corn, cotton, wheat, and rice
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
- 50:1 for gold and silver
- 100:1 for soft commodities
Markets.com is a global name traders can depend on because the broker operates under licenses issued by the CySEC and the Financial Sector Conduct Authority. The broker has what it takes to compete with some of the most established trading platforms as Markets.com allows its users to trade and invest in more than 8,000 instruments, including bonds, shares, ETFs, cryptocurrencies, and indices. Markets.com users can trade or invest their way also if commodities are what they prefer, as metals, energy, and softs are all added to the broker’s portfolio.
As a Markets.com user, you will be given access to a number of trading tools, including technical analysis, market sentiment, and fundamental analysis, among others. The lightning-fast trade execution and industry-low spreads are also among the reasons why the broker might be an instant attention-grabber for traders.
The platforms the broker offers are the gateway to the financial markets traders want to get exposure to, and to ensure that its users will be offered a premium-quality trading environment, Markets.com offers MT4 and MT5 platforms. There is also a one-tap mobile trading platform that will give traders the freedom to play the commodities market even when they are out and about.
The respectable offerings of features and easy-to-use platforms are not the only reason Makrets.com’s popularity is constantly growing. The broker also delivers when it comes to payments and when its customer support department is concerned. If you have any issues, you can forward them via email, live chat, or using the online query form.
- Min Deposit
FeesNo deposit and inactivity feesCommissions
- $50 for standard accounts
- $2,000 for prime accounts
- $$20,000 for institutional accounts
SpreadSpread from 0.00, 0.1, or 0.8Leverage EU
- No commission for standard accounts
- $6.00 per lot for prime accounts
- 20:1 for gold and silver
- 10:1 for energies
Risk Warning: Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and, therefore, you should not invest money you cannot afford to lose. You should make yourself aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any questions or concerns as to how a loss would affect your lifestyle.
- 500:1 max leverage for metals
- 100:1 max leverage for energies
BlackBull Markets is an award-winning New Zealand broker that gives its users quick and easy access to well over 23,000 tradable instruments. Equities, Forex, commodities, precious metals, energy, and shares are some of the markets traders can get exposure to on MetaTrader4, MetaTrader5, or WebTrader.
The broker was registered in 2014, and today it is one of the most preferred platforms for trading commodities. BlackBull Markets keeps you covered no matter if you prefer gold, silver, crude oil, natural gas, coffee, cotton, corn, and cocoa, among others. There is a wide range of educational tools that are sure to help BlackBull Markets users get the knowledge they need in order to make smart trades, including glossary, videos, and guides.
The broker strives to offer services that fulfill the requirements of seasoned readers and novices, and to achieve this has introduced several account types, including standard, prime, and institutional. All three account types will allow traders to attain complete trading experience, but depending on their pick, they will benefit from commission-free trades, access the complete list of tradable instruments, and get a leverage of up to 500:1.
While using the services of BlackBull Markets, traders can have full confidence that the chances of malpractice and fraud are reduced to a minimum because the broker is licensed by the Financial Markets Authority.
- 4. TickmillMin Deposit$100Fees
- Deposits starting from $5,000 are included in the zero fees policy
- The broker covers the transaction fees of up to $100 or the equivalent of that amount
- The broker might charge a maintenance fee
- Zero commission for classic accounts
- 2 per side per 100,000 traded for pro accounts
- CFDs on stocks, bonds, oil cryptocurrencies, and stock indices are commission-free
- 1 per side per 100,000 traded for VIP accounts
- Spreads from 0.00 for precious metals
- 0.04 minimum spread for Brent and WTI oil
- Up to 20:1 for precious metals
- 10:1 for oil
Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd. You should consider whether you understand how CFDs or our other products work and whether you can afford to take the high risk of losing your money.
- 50:1, 100:1, 125:1, or 500:1 depending on the precious metal
- 100:1 for oils
Founded in 2014, Tickmill has built a reputation of a top-ranking CFDs and Forex broker. The broker’s product portfolio is sure to grab the attention of traders that are interested in precious metals, bonds, indices, Forex, stocks, cryptocurrencies, stock indices, and oil, among others. Traders will have the chance to access some of the most chosen instruments on the market, including MetaTrader4, MetaTrader5, and WebTrader.
The broker claims that it offers premium trading conditions, no matter the account type its users will settle on. Whatever your trading style or level of experience, you are sure to find an account type that meets your requirements, as Tickmill offers classic, VIP, and pro account types. No matter which of these options traders will pick, they will benefit from maximum leverage of 500:1, the same range of base currencies, 0.01 minimum lots, and will be allowed to use the strategy they prefer.
Becoming a trader at Tickmill is just a few steps away, and once they download the preferred platform, users should deposit through one of the featured funding methods. Traders can transfer the preferred amount or withdraw their profit using Neteller, PayPal, Paysafecard, Skrill, Mastercard, Visa, Sofort Banking, or bank transfer, among others.
The broker puts the safety of its users’ bankrolls first, and keeps their funds in segregated accounts with top-tier banks. The ultra-fast execution times and the dedicated customer support add the finishing touches to the complete trading experience Tickmill offers.
- 5. AxioryMin Deposit$10FeesNo deposit and withdrawal feesCommissions
- 6 USD/lot for Nano and Tera accounts
- from 1.5 USD/lot for Alpha accounts
- No commission for standard and max accounts
- Between 0.16 and 22.56 for Nano and Tera Account
- Between 0.36 and 22.57 for standard accounts
- Between 0.43 and 22.69 for MAX accounts
- Between 0.056 and 0.057 for Nano and Tera Account and standard accounts
- Between 0.066 and 0.067 for MAX accounts
- Metals: 100:1 or 20:1
- Energy: 20:1
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
With more than ten years of experience under its belt, Axiory is an international multi-asset broker traders should add to the list of their must-visit commodity trading platforms. The broker offers trading conditions that work to traders’ advantage and does not compromise when security and transparency are concerned. To ensure that the protection of traders’ funds is up to the standard, the broker offers the negative balance protection feature, keeps them in segregated accounts, and undergoes regular audits by third-party companies.
To ensure that traders will make the most out of their trading experience, the broker has lowered its numbers, and as a result, has introduced spreads that start from 0.00, leverage of up to 777:1, minimal slippage, positive slippage, and low to no commission.
The award-winning broker offers some of the most liked markets, including Forex, indices, stocks, ETFs, metals, oil, and energy. The metal assets traders can get exposure to include gold, silver, platinum, and palladium, and energy like Brent oil, WTI oil, and natural gas, among others.
The account types offered by Axiory are five in total, and to guarantee that professional traders and total novices will be accommodated, the broker offers standard, nano, tera, alpha, and max accounts. Funding any of these will take no time at all, and traders can rely on some of the most established payment processors, including Neteller, Skrill, Visa, bank transfer, and STICPAY, among others. The funding and withdrawal process is exceptionally straightforward, and, best of all, traders will not face extra charges.
- 6. TMGMMin Deposit$100FeesNo deposit and withdrawal feesCommissionsNo commissionSpread
- Between 0.1 and 18.5 for metals
- Spread from 0.00 for energy
Leverage non-EU400:1 and 100:1 for metalsThe information provided on this website is general in nature only and does not constitute personal financial advice. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs. Investing in CFDs and Margin FX Contracts carries significant risks and is not suitable for all investors. You may lose more than your initial deposit. You don’t own, or have, any interest in the underlying assets. We recommend that you seek independent advice and ensure fully understand the risks involved before trading. It is important that you read and consider disclosure documents before you acquire any product listed on the website. The information and advertisements offered on this website are not intended for use by any person in any country or jurisdiction where such use is contrary to the local laws and regulations. Products and Services offered on this website is not intended for residents of the United States.
- 100:1 for energy
- 20:1 or 10:1 for metals
TMGM is an Australia-based broker that has been pushing boundaries through the premium-quality services it offers since 2013. The broker is a leading provider of CFD, and its portfolio covers markets like cryptocurrencies, indices, Forex, commodities, precious metals, and energies.
If energies and metals are what traders prefer, they will gain access to platinum, silver, gold, Brent Crude oil, and WTI oil, among others. Going for these markets means that traders will benefit from spreads that start from 0.00 or 0.2 and trade with a leverage of 100:1 or 400:1. Additionally, they will never experience requotes and will have the opportunity to fulfill their potential using the strategy they prefer.
As a TMGM user, you will be allowed to go for a classic or edge account that are both available in demo variants. Yet, if traders cannot decide which account type will work better for them, they can check the recommended account type after answering several simple questions.
The broker has the right platform for traders, no matter if they are making their first steps in trading commodities or they already have plenty of experience, and no matter if they prefer playing the market on the go or from their computer. Traders will gain access to some of the industry-leading and cutting-edge platforms, including MT4, MT5, and IRESS.
Thanks to them, TMGM users will benefit from order flexibility and additional trading timeframes. IRESS is a web-based trading platform TMGM users might pick to trade commodities because it offers true market depth and breadth, advanced charting capabilities, breaking news, and more than 50 indicators.
The broker has seals of approval from three reputable regulators, including the FMA, ASIC, and VFSC, which goes to prove that it delivers in terms of reliability.
- 7. ActivTradesMin Deposit$500Fees
CommissionsA commission is only charged on stocks ($0.02 per share)SpreadBetween 0.005 and 0.5Leverage EU20:1 and 10:1Leverage non-EU
- 1.5% fee on deposits via credit and debit cards
- £9 fee on withdrawals executed via bank transfer
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
- 200:1 for gold and silver
- 50:1 or 100:1
ActivTrades started operating in 2001 as a broker that specializes in Forex, but throughout the years, the broker has considerably expanded the assortment of markets it offers. Today, ActivTrades users can pick and choose from well over 1000 CFD and instruments across ETFs, shares, Forex, indices, financials, and commodities.
The commodities CFDs the broker offers include grains, softs, energies, and metals, and opting for any of these means that ActivTrades users can trade mini and micro lots, benefit from fully automated execution, and what is even better is that there are no overnight fees.
With more than 20 years of experience in serving traders from all corners of the globe, the broker is perfectly aware that quick execution times with low latency are of paramount importance and makes sure that this is exactly what its users will get.
In order to provide its users with an optimal trading experience, the broker has seen to it that the company relies on a state-of-art infrastructure. The trading environment the broker offers is accessible on tablets, smartphones, and computers, and the mobile platform ActivTrades offers brings functionality and speed to the palm of traders’ hands, no matter if their device runs on iOS or Android.
The broker offers advanced protection measures to its users, and their funds will be kept in segregated accounts. Traders will be offered additional insurance to protect their funds and will make use of the negative balance feature.
ActivTrades does not undervalue the significance of customer care, and its users can get assistance in one of the 14 supported languages, no matter if they prefer to forward their queries via email, live chat, or over the phone.
- 8. Global GTMin Deposit$10Fees
- No deposit and withdrawal fees
- $10 monthly dormant fee
- No commission on Cent, Mini, Standard+, Standard FX, and PRO Accounts
- A maximum of $6 round-turn on all FX Asset Classes on ECN Account
Leverage EUN/ALeverage non-EU
- 10 min spread for metals
- 6 or 12 minimum spread for energies
Risk Warning: CFDs are complex instruments and carry a high level of risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether trading is appropriate for you. You should not invest money that you cannot afford to lose. Leveraged products may not be suitable for everyone and may result in loss of all your capital. Read full Risk Disclosure here.
- 100:1 for energies
- 500:1 or 1000:1
Global GT is a broker that emerged on the online trading scene in 2019 with the idea to revolutionize the experience of its users. To create a trading environment that will suit the preferences of all its users, the broker gives them a choice of six account types, including cent, mini, standard FX, standard +, pro, and ECN.
Traders should keep in mind that the range of asset classes they will be given access to will depend on the account type they will pick. Yet, Global GT users who are interested in trading commodities will be given greater freedom as this asset class is within reach no matter the chosen account type. Gold, WTI oil, Brent oil, and natural gas are only some of the commodities that are part of Global GT’s portfolio.
As a user of the trading platform, you will have the opportunity to trade on MT5, which is one of the best-known and most reliable trading platforms available out there. It offers enhanced productivity and performance, exclusive indicators, analytical tools, a variety of pending orders, and fast transaction speed, among others, thus guaranteeing an ultimate trading experience.
To ensure that the experience of its users will be rewarding from the outset, Global GT has introduced a generous sign-up deal. Returning users of the trading platform are also catered to as they can claim a series of loyalty bonuses. In order to redeem any of these bonuses, traders should first top up their accounts which will be a breeze thanks to the wide variety of accepted funding solutions.
As for the countries of regulation of the broker, Global GT is authorized by the FSCA and the FSA.
- 9. SkillingMin Deposit€100 or €5,000 depending on the account typeFeesFree-of-charge deposits and withdrawalsCommissions
- Zero commission for standard accounts
- Trading volume commission ($30/million dollar volume) for premium accounts
- 1.3 spread minimum for silver
- 15 spread minimum for gold
- Between 1.61 and 9, depending on the soft commodity
Trading financial products on margin carries a high degree of risk and is not suitable for all investors. Please ensure you fully understand the risks and take appropriate care to manage your risk.
- 200:1 for gold
- 100:1 for other commodities
Established in 2016, Skilling is a rapidly-growing Scandinavian broker that resonates exceptionally well with traders interested in commodities. The broker has seen to it that it will deliver when it comes to platform functionality and market diversity, and in addition to commodities, its users are also offered a choice from markets like Forex, cryptocurrencies, shares, and indices.
Traders will have the opportunity to speculate on the price movements of a number of commodities, including silver, gold, Brent oil, WTI oil, natural gas, cotton, sugar, cocoa, and corn, to name a few.
In addition to the substantial number of trading opportunities the broker presents its users with, Skilling offers user-friendly and rich platforms that are sure to enhance traders’ experience further. Skilling Trader, Skilling cTrader, Skilling MetaTrader 4, and Skilling Copy are the platforms traders are offered a choice from.
The available account types are tailored to meet the requirements of total novices and professional traders, and depending on their level of experience, they can go for a standard or premium account. No matter which account type appeals to traders more, in both cases, they will benefit from maximum leverage of 500:1, 50% stop out level, negative balance protection feature, and will be allowed to go for scalping.
The broker goes out of its way to make trading straightforward and accessible to all its users, and, most importantly, to ensure that traders will be offered a secure and transparent environment. Traders can rest assured that their sensitive information and funds are fully secured with a properly regulated broker, as Skilling is authorized by the Financial Services Authority and the Cyprus Securities and Exchange Commission.
- 10. VT MarketsMin Deposit$100FeesNo handling fees for deposits and withdrawalsCommissions
- USD $0.03
- (round turn $0.06) ECN charge
- No commission for Islamic and standard accounts
- Between 0.056 and 58 for energy
- Between 1 and 26 for metals
Trading Forex and CFDs carries the risk of losing substantially more than your initial investment and should only be traded with money you can afford to lose. You don't own or have any rights to the assets that underly the derivatives (e.g. the right to receive dividend payments). Ensure you fully understand the risks involved. Trading leveraged products may not be suitable for all investors. Before trading, please take into consideration your level of experience, investment objectives and seek independent financial advice if necessary. Please consider our legal documents and ensure that you fully understand the risks before you make any trading decisions.
Offering easy and transparent access to some of the world’s most popular financial markets, VT Markets is an Australia-based broker that emerged in 2016. Due to the authorization and regulation in several jurisdictions, including the Australian Securities and Investments Commission, Financial Conduct Authority, and the Cayman Islands Monetary Authority, the broker is considered reliable and trustworthy.
While pursuing their financial goals, traders can decide between a number of markets, including Forex, energy, indices, precious metals, soft commodities, and shares. Gold, silver, copper, platinum palladium, cotton, sugar, coffee, cocoa, natural gas, crude oil, and gasoline are only some of the commodities VT Markets’ users can trade.
Besides, there is an excellent variety of trading platforms and account types, thus promising that traders will be offered tailor-made services. VT Markets offers three account types, including standard, raw, and swap-free, and it is up to traders to pick the pricing model and the range of markets they prefer to access.
In order to ensure that its users will enjoy a superior trading experience, the broker has introduced a number of trading tools, including trading signals, an expert advisor, and a Forex calculator. Additionally, traders will be offered actionable insights into their trades to improve their performance.
Special deals are where the broker truly shines, and newcomers and traders who have been using VT Markets’ services for a while can claim offers that will undoubtedly lift up their trades.