Commodities Trading Canada

Commodities Trading Canada

Trade Commodities with FP Markets


for our full list of Commodities and typical spreads

Enjoy leveraged trading on a wide range of commodities including oil, gas, and precious metals including gold. Our advanced trading platforms and relationship with top-tier liquidity providers allow us to provide the ideal trading conditions for those in Canada and across the world. Increased levels of market volatility has resulted in more traders turning to commodities as a means of portfolio diversification. The additional benefit of leveraged trading allows speculators to capitalise to price movements in this unique asset class.

Contracts For Difference (CFDs) are an easy way to start trading commodities as you can gain exposure to market prices without having to acquire and store the physical commodity. Using advanced trading platforms such as MetaTrader 4, MetaTrader 5, and Iress, traders are able to access real-time commodity prices. A combination of deep liquidity and fast trade execution ensure minimal trading costs for Canadian traders.

With the Canadian dollar being a 'commodity currency', there are consistently high trade volumes during peak local times. FP Markets is constantly expanding it's commodities CFD offering which includes oil, natural gas, and precious metals including gold, silver, platinum and palladium.

What are the benefits of commodities trading?

  • Leverage up to 30:1

  • Choose from a wide range of products including energy commodities, metals and agricultural products

  • Enter and exit trades whenever you want to, 24/5, across almost all commodities markets

  • Maximum trading opportunities with the ability to go short or long, irrespective of volatility levels

  • No price manipulation and no requotes

  • Risk Management - Useful for trading strategies such as portfolio diversification and hedging

  • Benefit from low margin, low-cost trading, without compromising execution

The Top Ten
to Trade

Commodities are essentially the raw materials from which other goods are created; the basic building blocks of the global economy. Consequently, they often serve as an excellent investment vehicle. Commodities fall into two broad categories: hard commodities and soft commodities.

Hard commodities are those that are mined from the earth or extracted from natural resources. This category includes metals such as gold, silver and iron, and energies such as oil, natural gas and coal. Soft commodities are agricultural products such as livestock and crops. The commodity markets are popular among traders. This is because they are highly volatile, a feature that provides traders with greater opportunities for success. What separates commodities from other goods is the fact they are interchangeable and standardised, with their values set by the relevant commodity exchange.

However, when it comes to commodities trading, not all commodities are equal.

Some are better than others. With a wide range of commodities on the market, it’s important to know what makes a commodity good for trading.

  • Crude Oil

  • Gold

  • Silver

  • Platinum and Palladium

  • Base Metals: Copper, Iron, Steel, Aluminium

  • Coffee

  • Natural Gas

  • Soya Beans

  • Corn

  • Wheat

What Makes a Good
Trading Commodity?

When trading commodities, liquidity is the primary thing you should consider. This is because liquidity determines the ease with which you can sell or buy a commodity. A liquid market is generally associated with relatively lower risk as there will likely be someone willing to take the other side of a trading position. A good commodity will usually have a well-established market of buyers and sellers at any given time.

Highly liquidity also means that a commodity will have less risk of slippage. Slippage refers to the losses that occur when bid-offer spreads are wide and it’s a common occurrence among commodities that exhibit low degrees of liquidity. Liquidity differentiates the most-traded commodities from the rest of the flock. This leads us to an all-important question.

What is the best Platform to trade Commodities?

MetaTrader 4. The world's most popular trading platform.

Spreads from 0.0 pips & leverage up to *500:1

Customisable interface and alerts

Traders Toolbox - suite of 12 online trading tools

One-click trading

Live price streaming on Live accounts and Demo accounts 128-bit encryption for secure trading

Expert Advisors (EAs)

Customisable alerts

Compatible with iOS, Android and Mac devices

6 Reasons to Choose FP Markets

An Australian Regulated Forex broker

Globally Regulated

Segregated client funds
& regulation in Australia

Tighter Spreads Market

leading spreads from
0.0 pips, 24/5

Faster Execution

Low latency, ultra-fast
execution under 40ms

Advanced Platforms

MT4, MT5 & WebTrader with
superior client portal

24/7 Multilingual
Customer Support

Award-winning support &
& personal account managers

Established in 2005

15+ years
trading experience

What is Commodities Trading?

Commodities trading involved the buying and selling of raw materials, many of which are used as inputs into creating other products. Commodities have been traded for thousands of years, initially through the use of a barter system. The ways to trade them have continued to increase. Commodities are now offered on exchanges and can be investing in through options, futures contracts, exchange traded funds (ETFs) and mutual funds. The growing trend is to invest in them using CFDs which provide a range of benefits including the ability to capitalise on price movements in both directions.

CFDs do not involve delivery of the asset but are traded based on the price of the underlying asset. The asset class that is commodities can be broken into two categories; hard commodities and soft commodities. Hard commodities are natural resources including Brent Crude Oil, natural gas, iron ore and precious metals. In contrast, soft commodities are grown. They include coffee, sugar, orange juice, ethanol and soybeans along with agricultural commodities such as live cattle, feeder cattle.

Supply and demand, currency prices, economic growth, and weather are among the factors that impact commodity prices. Traders can use fundamental analysis or technical analysis to predict the future price of commodities. Canada is a large exporter of commodities which is why the Canadian dollar is closely correlated with commodity prices. In addition, commodities can be negatively correlated with other asset classes such as those found on stock markets. Factors such as adverse weather and even interest rates can impact commodities prices which in turn have an effect on other financial markets. Canadian traders can access commodities such as oil markets almost 24 hours per day, 5 days a week.

An Example of Leveraged
CFD Commodities Trading

Suppose you want to trade CFDs, where the underlying asset is the XTIUSD a commodity, also known as Crude Oil. Let us suppose that the XTIUSD is trading at:

You decide to buy 2,000 barrels of XTIUSD because you think that the XTIUSD price will rise in the future. Your margin rate is 10%. This means that you need to deposit 10% of the total position value into your margin account.

Now, in the next hour, if the price moves to 83 / 83.10, you have a winning trade. You could close your position by selling at the current price of USD 83

In this case, the price of crude oil moved in your favor. But, had the price declined instead, moving against your prediction, you could have made a loss. If that loss reduced your free equity to less than USD 16400, your broker would have issued a margin call and will close all your trades if the equity falls at 50% of 16400.

If the price
To You could Gain or Lose
for a Long Position
Resulting in a Return
of the Initial Margin
Rises by 1% 82/82.92 USD 1640 10%
Declines by 1% 81.18/81.20 -USD 1640 -10%

CFD Commodities (MT4/MT5)

Symbol Product   Standard A/c
    Min Avg
WTIWest Texas Intermediate Crude Oil vs US Dollar Future0.040.04
XBRUSDBrent Crude Oil vs US Dollar Cash0.030.05
XNGUSDNatural Gas vs US Dollar Cash0.0240.03
XPDUSDPalladium vs US Dollar Cash15.922.94
XPTUSDPlatinum vs US Dollar Cash5.156.67
XTIUSDWest Texas Intermediate Crude Oil vs US Dollar Cash0.020.04

Soft Commodities (MT4/MT5)

Symbol Product   Standard A/c
    Min Avg
COCOACocoa vs US Dollar Cash0.632.48
COFFEEUS Coffee vs US Dollar Future2.252.33
CORNCorn vs US Dollar Cash1.672.09
SOYBEANSSoybeans vs US Dollar Cash1.382.12
WHEATWheat vs US Dollar Cash1.392.12

Types of Commodities

Commodities are raw materials or agricultural outputs that appear naturally and are used in the production of other goods. They are recognised as the building blocks of the global economy and play a significant role in financial markets. Commodities are often used as part of a risk management strategy. They are recognised as a hedge against inflation and have a safe-haven appeal in time of high market volatility. In particular, hedging with gold is very popular.

There are two types of commodities

Hard commodities: Refers to natural resources that are mined or extracted. This includes ferrous and non-ferrous metals.

Soft commodities: Agricultural products or livestock.

For the purposes of trading, Commodities are further classified into four main categories:

Metals: Includes precious metals such as gold, silver, platinum, and palladium.

Energy: Crude oil and natural gas are some of the most traded commodities. Heating oil, gasoline, ethanol, and electricity are among other energy sources.

Agriculture: Agricultural commodities are centred around staple crops and animals. Wheat, rice, corn, soybeans coffee are among the most common crops. The classification of animals includes livestock and meat such as live cattle, pork, and eggs.

Livestock and Meat: Fall under the likes of meat, poultry, and dairy.

What Are the Most Traded Commodities?

The most traded Commodities are those which have an established market of buyers and sellers. Higher volumes of trade results in deep liquidity and lower trading costs - both of benefits of CFD trading. In terms of trading volume, the most popular commodities are:

Gold: Of the precious metals, gold continues to lead the way. Throughout history, gold has been a valuable commodity. The gold standard was in operation for almost a century and central banks continue to hold gold reserves. In a similar manner to forex trading, gold can be trading against major currencies such as the US dollar.


Other Metals: Silver, platinum and palladium are among a long list of metals with significant trading volume. The scarcity of these metals ensures a sustained long-term value, a key reason why traders consistently turn to commodities when there is substantial uncertainty in the market.

Crude Oil: The daily use of oil makes it one of the most traded commodities. Petrol and diesel are examples of refined oil which are used by almost every individual on the planet in one way or another. Consequently, oil prices are heavily scrutinised.


How to Trade

One of the easiest ways to trade commodities is through Contracts For Difference (CFDs). A leveraged derivative instrument, rather than purchase the physical asset, traders can capitalise in commodities prices using advanced trading platforms.

Unlike other instruments such as futures and options, there is no fixed expiry date on CFDs. This means that the value of the contract is not impacted by time decay. In addition, as CFDs are traded based on the underlying asset, there are significantly higher levels of liquidity making it easier to both open and close positions.

The ability to trade in both directions (long positions and short-sell) make CFDs the ideal product for trading. Their flexibility makes them ideal for a large number of day trading strategies such as swing trading, and scalping. Our advanced trading platforms allow Canadian traders to use Expert Advisors (EAs) or mirror the trading of successful traders using Copy Trading.


Trading - FAQ

  • New York Board of Trade (NYBOT)

  • Chicago Mercantile Exchange (CME)

  • New York Mercantile Exchange (NYMEX)

  • Intercontinental Exchange (ICE)

  • CBOT - Chicago Board of Trade (CBOT)

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