Commodities Trading

Commodities Trading
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COMMODITIES

Trade Commodities with FP Markets

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for our full list of Commodities and typical spreads

A combination of competitive pricing, advanced platforms and a wide range of Commodities allow FP Markets to provide UK traders with the optimal trading experience. Commodities are a unique asset class and play an important role in global financial markets. They are regularly used by traders to manage high risk trading conditions through portfolio diversification and hedging.

Contracts For Difference (CFDs) are an easy way to start trading Commodities as you can gain exposure to market prices without the need to acquire the physical commodity. Choose from a wide variety of products while benefiting from the latest real-time technology and available commodity prices. Advanced trading platforms including MetaTrader 4 ensure fast execution speeds and low slippage.

Relationships with some of the United Kingdom's largest financial institutions ensure deep liquidity and tight spreads which translates to low-cost trading. Trade CFDs on a wide variety of global commodities with access to real-time oil prices and energy commodities such as natural gas. Other raw materials such as precious Metals including gold, silver, platinum and palladium are also available for trade.

What are the benefits of commodities trading?

  • Leverage
    up to 500:1

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

  • Enter and exit trades whenever you want to, 23/5, 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

What is the best Platform to trade Commodities?

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

Discover the benefits of Commodities trading on one of the most powerful trading platforms available, MetaTrader 4 (MT4). Available across desktop and mobile platforms the MetaTrader 4 is available on the following platforms: Windows, WebTrader, Mac, iOS and Android.

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

Are there more platform options?

We recommend MetaTrader 4 for Commodities but a range of products can also
be traded on MetaTrader 5 and Iress platforms.

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 physical substances. They are often used to produce other goods and services. Commodities as an asset class are broken down into 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 must be grown and cared for. They include coffee, cocoa and soybeans along with agricultural commodities such as live cattle.

Price movements in commodities are primarily caused by supply and demand factors which makes them vulnerable to volatility as a result of macroeconomic factors. Fluctuations in commodity prices can occur as a result of events such as adverse weather, seasonal availability, natural disasters and other non-market factors typically found in other financial instruments.

The manner in which commodities are traded is also different. Unlike shares on a stock market, commodities are mostly traded in the form of futures contracts. Commodity futures trading and exchange-traded funds (ETFs) allow for hedging as traders are able to invest either in one particular commodity or a specific sector.

FP Markets offers a range of Trading Account Types, all of which allow for commodities trading in the form of CFDs. Traders can access oil markets and energy markets predict the potential direction of commodities prices and attempt to capture gains based on price fluctuations. There is no need to worry about time zones in the United Kingdom or the United States as the commodity 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 favour. 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 UK.

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
Take advantage of rising and falling markets
bullet News & economic calendar
bullet Technical indicators, charts & alerts
bullet Many more trading tools included

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* The average order execution time between the trade being received, processed and confirmed as executed by us is 35 milliseconds. As observed from our bridge provider between 01-02-2020 to 28-02-2020. FP Markets was rated by Investment Trends as the Best for Quality of Trade Execution 2019

** Terms and conditions apply.

DISCLAIMER: This material on this website is intended for illustrative purposes and general information only. It does not constitute financial advice nor does it take into account your investment objectives, financial situation or particular needs. Commission, interest, platform fees, dividends, variation margin and other fees and charges may apply to financial products or services available from FP Markets. The information in this website has been prepared without taking into account your personal objectives, financial situation or needs. You should consider the information in light of your objectives, financial situation and needs before making any decision about whether to acquire or dispose of any financial product. Contracts for Difference (CFDs) are derivatives and can be risky; losses can exceed your initial payment and you must be able to meet all margin calls as soon as they are made. When trading CFDs you do not own or have any rights to the CFDs underlying assets.

FP Markets recommends that you seek independent advice from an appropriately qualified person before deciding to invest in or dispose of a derivative. A Product Disclosure Statement for each of the financial products available from FP Markets can be obtained either from this website or on request from our offices and should be considered before entering into transactions with us. First Prudential Markets Pty Ltd (ABN 16 112 600 281, AFS Licence No. 286354). FP Markets is a group of companies which include, First Prudential Markets Ltd (registration number HE 372179), a company authorised and regulated by the Cyprus Securities and Exchange Commission (CySEC License number 371/18, Registered Address: Griva Digeni, 109, Aigeo Court, 2nd floor, 3101, Limassol, Cyprus. FP Markets does not accept applications from U.S, Japan or New Zealand residents or residents from any other country or jurisdiction where such distribution or use would be contrary to those local laws or regulations.