To trade metals and energy markets with tight spreads, and enjoy all the benefits of an ECN broker, choose commodity trading with FXOpen – regulated by the UK’s Financial Conduct Authority (FCA).Open a commodity trading account
FXOpen: A commodity trading platform for the experts
Commodity trading has a long history that pre-dates the development of the financial markets. It is the exchange of different assets based on the price of a physical commodity – usually metals and energy. The commodity market is high risk and high reward, and a more specialised level of knowledge is needed for traders to be successful.
The benefits of using the FXOpen commodity trading platform
Trade commodity CFDs with FXOpen using up to 1:20 leverage.
One platform, many markets
When you choose us as your broker, you can use one platform to cover different markets rather than focus just on commodity trading (metals and energy only), meaning you can dabble in indices, shares, forex and cryptocurrency* CFDs in one place.
Trade commodities with confidence
As we’re fully regulated by the FCA in the UK, we have a duty to all our clients to hold ourselves to the highest standards. Therefore, you can trade with confidence with us.
Access automated trading
You can either download and use ready-made scripts or create a custom script or indicator based on your commodity trading strategy.
Access anytime, wherever you are
You can see live commodities and global market updates via the desktop, mobile or web-based version of the MT4 trading platform. Where a direct download isn’t available, commodity trading online through the web-based version is especially handy for Apple Mac users.
Access to comprehensive analysis
From commodity prices to an overview of the most traded commodities, you can use over 50 built-in indicators and graphic tools to run a technical analysis of the current state of play. There’s also the quotes history centre, strategy tester and news, all designed to help you increase your commodity trading knowledge.
The different methods of commodity trading
Setting up in commodity trading in Hong Kong – or elsewhere – requires an understanding of commodity trading as a process. Therefore, it’s worth looking at the different methods involved in the commodity market.
Most commodity traders operate through a futures exchange, which is where an agreement is reached to buy or sell an asset at a predicted price at a set time in the future. The buyer must pay the agreed commodity price when the futures contract expires.
If, in the time before the contract expires, the asset’s value rises above the agreed price, the buyer is likely to make a profit. Should the market price fall below the benchmark, the buyer will suffer a loss.
An alternative commodity trading method is for traders to purchase stocks in businesses that are associated with these commodities, such as mining companies or oil refineries. This approach means commodity traders are taking a risk on both the value of the product and on the performance of the company itself.
What are the most traded commodities?
If demand for a commodity is high, traders are better placed than if there’s no demand. The commodity market is usually divided into four main categories: metals and energies – both of which you can trade with FXOpen – and livestock and agriculture.
Metals including gold, silver, platinum or copper
There are some precious metals such as gold that have a conveyable value. This can make them attractive to commodity traders.
Energy sources such as crude oil and natural gasThis commodity market can be impacted by factors such as production rates and the development of renewable energy sources.
Livestock including cows, pigs and sheep
This commodity can be affected by economic inflation and the impact that has on food prices, also the spread of disease, weather conditions and the move away from eating meat.
Agriculture products such as sugar, wheat and corn
These commodities formed the first markets in the 1800s, when farmers would lock in prices for their produce at different times of the year.
Commodity market: The risks and rewards
Like any type of trading, there are no guarantees when it comes to commodities. Before entering the commodity market, traders must understand the highs and lows that are involved and ensure they’ve done the necessary research and analysis before taking up any positions.
The commodities and global markets are particularly high risk and high reward – probably more so than most other markets. However, commodity traders can take steps to balance out the risks, but it’s a market that needs specialised knowledge for traders to be successful.
Open a commodity trading account
If you want to trade metals and energy markets with tight spreads and low commissions, choose FXOpen. When you choose commodity trading in Hong Kong with us, you’ll find that we’re fully authorised and regulated by the UK’s FCA, which makes us a reputable choice for commodity traders.
What factors affect commodity prices?
Supply and demand have a significant impact on the commodity market. For instance, if oil production levels in the Middle East – a location where there is typically an abundance of oil supplies – were to drop, the commodity prices for oil would be likely to rise.
Issues that are beyond traders’ control can also affect prices, which is one of the main reasons commodity trading is widely seen as higher risk.
For example, US elections have led to commodity prices for precious metals – especially gold – being affected. Therefore, metals are one commodity market that traders will monitor closely when candidates embark on their campaigns.
What is a commodity broker?
A commodity broker is a link between the trader and the market, presenting quotes through its liquidity providers. The broker’s trading platform reflects the best possible market conditions and offers the capability to implement trades. A commodity broker will charge a commission on every deal and its interests are aligned with the commodity trader.
How success as a commodity trader can be defined
Success for one commodity trader isn’t necessarily the same as it is for another. You must begin your journey in the commodity market with a clear idea of what you want to achieve and how you’re going to get there.
By setting targets, you will give your trading strategy a framework and you’ll be able to manage your expectations as you progress. Remember, commodity trading is high risk and high reward, so you need to be ready and have a plan in place if you lose.
Due to the nature of commodities, even the most experienced traders won’t get it right every time. But it’s how you recover that will stand you in good stead. Have faith in your research and know how you define success.