FP Markets offers a wide range of commodities futures products, including interest rates, currencies, metals, energy and agriculture. FP Markets commodity CFDs help you find the right exposure you need. Traders may hedge their portfolios using interest futures or diversify their assets using commodity and currency futures that can have low correlation to stocks.
Commodities trading represents the buying and selling of set quantities of homogenous, or near-homogenous assets. E.g, Natural Gas, Crude Oil, Gold. Commodities trading is typically dominated by agricultural products, energy and metals. Price movements in commodities are usually seen as bellwethers for the overall health of the industry that produces/consumes them.
E.g. the price of copper is typically associated with the outlook of the construction industry and, by extension government funded infrastructure projects. Similarly, gold is typically seen as a safe store of value and tends to increase in price during times of uncertainty. 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, trading in commodities can be either speculative or for hedging purposes. Traders can trade commodities to express their outlook on certain industries or to hedge their trading portfolio.