Commodity Trading in the UAE
Trade metals and energy markets with tight spreads. Enjoy all the benefits of an ECN broker when you buy and sell commodities with FXOpen – regulated by the UK’s Financial Conduct Authority.Begin commodity trading in the UAE
FXOpen: Commodities trading in Dubai and the rest of the UAE
Commodity trading dates back to a time well before the emergence of the financial markets. It involves the exchange of different assets based on the price of a physical commodity – typically metals and energy. The commodity market is one of high risk and high reward, where a more specialised level of knowledge is required.
Advantages of commodity trading in the UAE with FXOpen
Trade commodity CFDs with FXOpen using up to 1:20 leverage.
One platform with multiple instruments and markets
You can use one platform for commodity trading (metals and energy only) as well as indices, shares, forex, and cryptocurrency* CFDs.
Trade commodities in confidence
Access to automated trading
You can download and use ready-made scripts and expert advisors or create a custom indicator or script, based on your bespoke commodity trading strategy.
via the desktop, web-based or mobile version of the MT4 and MT5 trading platforms.
Access to a wide range of analysis
50+ built-in indicators and graphic tools for technical analysis, quotes history centre, strategy tester and news, all designed to help you increase your knowledge of the commodity market.
What is commodity trading and how does it work?
Most commodity traders operate via a futures exchange. This is where an agreement is reached to buy or sell an asset at a predetermined price at a certain point in time. When that futures contract expires, the buyer is obligated to pay the commodity price that was agreed.
If the asset’s value has risen above the agreed price, the buyer will make a profit. But if the price has fallen below that benchmark, they will incur a loss.
An alternative to futures and commodities trading is to purchase shares in businesses that are associated with these commodities – such as mining companies or oil refineries. This means traders are taking a risk on both the value of the commodity and on the performance of the business.
Of course, commodity prices are likely to affect an organisation’s share price, but it’s not the only contributing factor. Businesses can still turn a profit even if the commodity itself declines in value.
What are the most traded commodities?
The commodity market can typically be divided into four main categories: metals and energies, both of which you can trade with FXOpen, and livestock and agriculture.
Metals including gold, silver, copper or platinum
Some precious metals such as gold have a conveyable value, which can make them an attractive proposition for commodity traders.
Energy sources such as crude oil and natural gas
Buying and selling these commodities can be impacted by a number of factors including production rates and the development of renewable energy sources.
Livestock including cows, pigs and sheep
This is a commodity that can be affected by economic inflation and its impact on food prices, weather conditions, the spread of disease and societal attitudes towards eating meat.
Agriculture products such as corn, sugar and wheat
These formed the backbone of the original markets in the 1800s, when farmers would lock in prices for their produce at various times of the year.
The risks and rewards of the commodity market
As with all types of trading, there are no guarantees when it comes to commodities trading in Dubai and the rest of the UAE. You need to gain an understanding of how profits and losses can affect your portfolio and ensure you’ve done adequate research and analysis before taking up any positions.
When commodity trading in the UAE, be aware that this market is particularly high risk and high reward. You can take steps to guard against those risks, but it’s a market that calls for a level of specialised knowledge in order to be navigated successfully.
Start commodity trading in the UAE with FXOpen
You can buy and sell commodities in the metals and energy markets with tight spreads and low commissions with FXOpen. We’re fully authorised and regulated by the FCA in the UK and we provide FSCS protection up to £85,000. We’re the reputable choice for commodity trading in the UAE.
What factors affect commodity prices?
As with almost any market, supply and demand has a huge impact on commodity prices. For example, if oil production levels fell, prices would be likely to rise.
Commodity trading is widely seen as higher risk because the market can also be influenced by events outside of traders’ control. Major political developments such as the US elections have historically had a significant impact on the price of precious metals – especially gold – so that is one commodity market that traders will keep a close eye on when candidates begin their campaigns.
What is a commodity broker?
A commodity broker provides a link between the trader and the market. It offers quotes via its liquidity providers while its platform reflects the best possible market conditions and provides the capability to execute trades. A broker will charge a commission on every transaction and its interests are aligned with that of the trader.
How to define success when commodity trading in the UAE
Your idea of success is unique to you and should not be measured against the goals of others. Before you venture into commodities trading in Dubai and the UAE, it’s vital to construct a clear idea of your objectives and how you’re going to achieve them.
Setting targets will help you to form a framework for your strategy as well as manage your expectations. Commodity trading can be high risk and high reward, so it’s important to be prepared for any losses and have a plan in place that will help you deal with those. Even those with vast experience in the commodity market won’t get it right every time, but you need to have faith in your research and be clear in your mind as to how you define success.
with FXOpen *Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules. They are not available for trading by Retail clients.