Trade metals and energy markets via CFDs. Enjoy tight spreads and all the other benefits of an ECN broker regulated by ASIC when commodity trading with leverage.Open a commodity trading account
FXOpen: The best commodity trading platform for experts
Commodity trading dates back centuries to an era long before the development of the financial markets. It involves the exchange of different assets based physical commodity prices – 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 Australia with FXOpen
Trade commodity CFDs with FXOpen using up to 1:20 leverage.
One platform with multiple instruments and markets
With us as your broker, 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
We’re fully regulated by ASIC in Australia. We have a duty to all our clients to hold ourselves to the highest standards.
Access automated commodity trading
Download and use ready-made scripts and expert advisors or create a custom indicator or script based on your own strategy when it comes to investing in a commodity.
Access anytime, anywhere
Access commodity trading online via the desktop, web-based or mobile version of the MT4, MT5 and TickTrader trading platform.
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 commodity trading knowledge.
What is traditional commodity trading and how does it work?
Traditional commodity trading is commonly done via a commodity futures exchange, which is where an agreement is reached to buy or sell an asset at a predetermined price at a certain time in the future. When that futures contract expires, the buyer is obligated to pay the commodity price that was agreed.
If the value of the asset has risen above the agreed price in the meantime, the buyer stands to make a profit. Conversely, if the market price has fallen below that benchmark, they will suffer a loss.
Alternatively, a traditional commodity trader can purchase stocks in businesses that are associated with these commodities – such as mining companies or oil refineries. Adopting this approach means commodity traders are not just taking a risk on the value of that particular product but on the performance of the company itself.
Commodity prices are likely to impact an organisation’s share price - but it’s not the only contributing factor. Businesses can still make a profit even if the commodity itself suffers a drop in value.
There is a third option however - which is CFD commodities trading with FXOpen.
What is Commodity Trading with CFDs?
FXOpen offers CFD commodities trading, which works slightly differently to traditional commodities trading. Our CFDs are agreements under which you agree to purchase an agreed volume of commodity as underlying at a particular exchange rate, then sell that commodity back at the relevant exchange rate later. These contracts do not result in the physical delivery of the relevant commodity.
Rather, upon settlement of the contract, the difference in value between the opening and closing positions will either be credited or debited to your account according to the profit or loss for the transaction.
Using CFDs allows you to start trading online with leverage for a fraction of the capital needed.
What are the most traded commodities?
A simple commodity definition is an economic product, usually a resource, that can be bought or sold. The commodity market can typically be divided into four main categories. They include metals and energies, which are available for commodity trading in Australia with FXOpen, and livestock and agriculture.
Metals including gold, silver, copper or platinum
Some precious metals including gold have a conveyable value, which can make them an attractive proposition for commodity trading.
Energy sources such as crude oil and natural gas
This commodity market can be impacted by several factors including production rates and the development of renewable energy sources.
Livestock including cows, pigs and sheep
This commodity 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
It was this type of commodity that formed the backbone of the first 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 commodity trading in Australia or elsewhere. It’s important that you understand and appreciate the risks and rewards before entering the commodity market. You should carry out in-depth research and analysis before taking up any positions.
The commodity market is particularly high risk and high reward, perhaps even more so than most other markets. Commodity traders can take steps to mitigate those risks, but it’s a market that requires a lot of specialised knowledge in order to be navigated successfully.
Start commodity trading in Australia with FXOpen
You can trade metals and energy markets with tight spreads and low commissions with FXOpen. We’re fully authorised and regulated by ASIC, making us one of Australia’s most reputable commodity trading companies.
What factors affect commodity prices?
As with almost any market, supply and demand has a huge impact on the commodity market. If oil production levels in traditionally prolific areas such as the Middle East were to drop for example, those commodity prices would be likely to rise.
Commodity trading is widely seen as a higher risk because the market can also be affected by circumstances outside of traders’ control. For example, major political events such as the US elections have historically had a significant impact on the price of precious metals, especially gold. That’s one commodity market that traders will monitor closely when candidates embark on their presidential campaigns.
What is a commodity broker?
A commodity broker acts as a link between the trader and the market, offering commodity futures quotes via its liquidity providers. Its trading platform reflects the best possible market conditions and offers the capability to execute trades. A commodity broker will charge a commission on every deal and its interests are aligned with that of the commodity trader.
How to define success for a commodity trader
Success might look very different to one commodity trader than it does to another. It’s important you enter the commodity market with a clear idea of what you want to achieve and how you’re going to do it.
Setting objectives will help to give your trading strategy a framework and it will allow you to manage your expectations as you progress. Remember, commodity trading is high risk and high reward, so you need to be prepared for any losses and have a plan in place that will help you recover from them.
Even the most experienced commodity traders won’t get it right every time. What’s important is that you have faith in your research and be clear in your mind as to how you define success.
*Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under ASIC Rules. They are not available for trading by Retail clients.