Commodities Trading

Commodities Trading
COMMODITIES

Trade Commodities with FP Markets

Click here

for our full list of Commodities and typical spreads

Trading commodities CFDs ("contracts for difference") is a great way to diversify your portfolio and hedge risks. FP Markets has carved a niche for itself in the commodity trading market in Australia, offering the optimal trading experience.

Choosing from a wide variety of products, while benefiting from the latest real-time technology and available commodity prices. When you choose to trade commodity CFDs with FP Markets, you get access to commodity prices worldwide with high execution speeds, low slippage,deep liquidity and tight spreads.

Trade CFDs on a wide variety of global commodities, including gold, silver and oil with an Australian-regulated broker provider giving you access to different asset classes on the same platform or a range of platforms as well as sophisticated risk management tools and trading tools.

What are the benefits of commodities trading?

  • Leverage up to 30:1

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

  • Enter and exit trades whenever you want to, 23/5, across almost all commodities markets

  • Trade in any direction you think the markets will go, short or long, maximising trading opportunities

  • No price manipulation and no requotes

  • Hedge Risks - Hedge your investment risks with high value assets, like gold and silver

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

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 30:1


Customisable interface, including colours of technical indicators


One-click trading


Live price streaming on Live accounts and Demo accounts 128-bits 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

24/5 Multilingual
Customer Support

Award-winning support &
personal account managers

Established in 2005

15+ years
trading experience

What is Commodities Trading?

Commodities trading represents the buying and selling of set quantities of homogeneous, or near-homogeneous assets. Popular commodities include Brent Crude Oil, Gold and other precious metals and soft commodities such as coffee, cocoa, soya etc. Price movements in commodities are usually seen as bellwethers for the overall health of the industry that produces/consumes them.

Commodity prices can be impacted by factors such as adverse weather, seasonal availability, natural disasters and other non-market factors typically found in other financial instruments. Typically, commodities trading in commodities can be either speculative or for hedging purposes. Traders can trade commodity markets to express their outlook on certain industries or to hedge their trading portfolio.

Through careful analysis, CFD traders predict the potential direction of commodities prices and attempt to capture gains based on price fluctuations. The market is open 24 hours a 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 21.82 /21.90, you have a winning trade. You could close your position by selling at the current price of USD 21.82

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 4360.00, your broker would have issued a margin call and will close all your trades if the equity falls at 50% of 4360.

If the price
of XTIUSD
To You could Gain or Lose
for a Long Position
Resulting in a Return
of the Initial Margin
Rises by 10% 23.98/24.05 USD 4350 299.33%
Rises by 5% 22.89/22.96 USD 2180 199.22%
Declines by 10% 19.62/18.68 -USD 4360 -100.50%
Declines by 5% 20.70/20.77 -USD 2200 -0.10%

CFD Commodities (MT4/MT5)

Symbol Product Standard A/c Raw ECN A/c
Min Avg Min Avg
WTI West Texas Intermediate Crude Oil 0.02 0.03 0.02 0.03
XTIUSD West Texas Intermediate Crude Oil Cash 0.05 0.05 0.05 0.05
XBRUSD Brent Crude Oil Cash 0.05 0.05 0.05 0.05
XNGUSD Natural Gas 0.027 0.004 0.027 0.004
XAUUSD Gold vs US Dollar 0.16 0.29 0 0.13
XAUAUD Gold vs Australian Dollar 0.56 0.88 0.46 0.78
XAGUSD Silver vs US Dollar 0.012 0.02 0.01 0.01
XAGAUD Silver vs Australian Dollar 0.016 0.03 0.014 0.02

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.

There are two types of commodities

Hard commodities: Refers to natural resources that are mined or extracted


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, palladium and copper


Energy: Crude oil and natural gas are the main energy products that are traded. Heating oil, gasoline and electricity are among others


Agriculture: Agricultural commodities are centred around staple crops and animals. Wheat, rice, corn, soybeans, coffee and 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: Eggs, Pork, Cattle and more

What Are the Most
Traded Commodities?

The most traded Commodities are those which have an established market of buyers and sellers. This translates to high levels of liquidity and lower trading costs - two of the main attractions when trading Commodities CFDs.

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. It is easily transferable for cash and often used as part of a hedging trading strategy as it often trades opposite to the United States dollar (USD).

Other Metals: Silver, platinum and palladium are among the most traded commodities. As they are considered a safe-haven investment, there is a wide range of Trading Strategies Using Precious Metals.

Crude Oil: The widespread use of oil makes it one of the most in-demand commodities. Petrol and diesel are examples of refined oil which highlights its importance in all forms of transportation. Its value as a source of energy is the reason why oil prices are heavily scrutinised.

Read our comprehensive list of Top Commodities To Trade.

How to Trade
Commodities?

There are several ways to trade commodities such as precious metals and oil. As they are a physical product, investors have the option of purchasing precious metals such as gold, silver and palladium. One of the main hurdles of doing so is the cost associated with storing such a valuable product.

This is one of the reasons why commodity futures trading emerged. Through exchange-traded funds (ETFs), you are able to enter into an agreement to buy or sell shares of an underlying ETF at an agreed price prior to a specified date. Many large corporations use futures markets to hedge against market volatility.

FP Markets offer CFD trading in commodities where you do not own the underlying asset and enter into a contract which, unlike futures contracts, do not have a specified end date. Trading Gold CFDs allows you to hedge against high risk market conditions using your margin trading account. Similarly, gold is also traded against major currencies in Forex Trading.

Commodities
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)

Start trading the global markets now!


bullet Access 10,000+ financial instruments
bullet Auto open & close positions
bullet News & economic calendar
bullet Technical indicators & charts
bullet Many more tools included

By supplying your email you agree to FP Markets privacy policy and receive future marketing materials from FP Markets. You can unsubscribe at any time.





Get instant Updates in Telegram
Sitemap | © FP Markets 2020