CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Commodities Trading

Diversify your trading portfolio with major commodities like oil. Build a strategy based on your view of the role commodities will play in national economies, where demand can signal slowdowns or future growth.

Why Trade Commodities

Commodities are primary goods that are practically identical and interchangeable with each other. Usually purchased in massive quantities, commodities like crude oil, livestock, grains, and metals are typically used in the manufacture of more complex goods. Since they form the basis of the consumer products we use in our daily lives, it’s easy to see that commodities play a fundamental role in domestic economies and the global economy.

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Portfolio Diversification

Commodities are a vital part of a balanced portfolio model

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A Key Factor

In particular, the price of oil is a key factor in the global economy

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Trading Opportunities

Oil markets often trend well, which can offer good trading opportunities

Commodities on MT4

Access the Hantec Markets MetaTrader4 platform, an award-winning technology available on desktop, mobile and Mac.

Why choose Hantec Markets

At Hantec Markets we offer trading in Gold and Silver, plus US and UK Oil. US Oil is a reflection of the US Crude oil market, whilst UK Oil reflects the Brent Crude oil market.

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30 years experience

The Hantec Markets Group of companies has been servicing traders since 1990

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Increase your knowledge

Use our wide range of educational resources to further your trading strategy

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One point of contact

When you have questions, we won't bounce you from department to department, you'll only ever have to talk to one person who will help you with anything you need

Commodities trading conditions

Have questions? We can help

Commodities fall broadly into two categories: hard and soft commodities. 

  • Hard commodities: These are natural resources extracted from the earth such as precious metals (gold and silver), base metals such as copper and aluminium, plus energy products, such as oil and natural gas. 
  • Soft commodities: Soft commodities (often described as “softs”) are broadly comprised of livestock and agricultural products. Livestock can include pork or live cattle. Agricultural (or “ags”) can include wheat, cocoa, sugar and soybeans.

Major market participants in commodities trading include commodities buyers and producers, investors, and speculators. Markets and exchanges were established initially to allow commodity producers and users of those commodities to exchange the commodity. As markets and exchanges have evolved to accommodate potential volatility of price movements, investors and speculators have become the major participants in commodity markets.

Supply and demand: All markets are driven by the dynamics of supply and demand for the asset being bought and sold. In commodity markets, however, this is even more pronounced. A significant rise (or fall) in demand for any particular commodity will likely give rise to a notable rise (or fall) in the price for the commodity. Conversely, changes to the supply dynamics for a commodity will do the reverse.

The US Dollar: Most commodities are quoted and traded in US Dollars. This means that changes in the value of the US Dollar against other currencies can impact the price of commodities. Generally speaking (though this relationship can shift), there is an inverse correlation between the value of the US Dollar and the price level of commodities.

Global economic conditions: The health of the global economy can have a significant impact on the overall demand for, and supply of, various commodities – therefore impacting the price.

Why should you consider trading commodities?

 Maybe you’ve never traded commodities and focused instead on markets like shares or stock indices, or you’ve been introduced to the world of trading through currency markets.

There are three main reasons why you should consider looking at commodities markets:

  1. Portfolio diversification,
  2. The negative effect of psychological bias
  3. Higher volatility.

Portfolio diversification: A diversified portfolio across different asset classes are viewed as beneficial in terms of mitigating risks and providing a more balanced approach to investing and (to a lesser degree) trading.

Avoiding the ambiguity effect: The ambiguity effect is when you favour something familiar over another choice where the risk is less known. Because you understand another asset class and its potential returns better than, for example, commodities, you may avoid trading in a particular instrument — even though trading in them could potentially produce a better return. By educating yourself to the world of commodities and commodity trading you introduce new ways to diversify your trading.

Higher volatility: Generally speaking, many commodity markets exhibit a more volatile nature than stock indices and Forex markets. Daily price movements in commodity markets tend to be higher. This affords the leveraged trader more scope to make higher gains. If your trading style benefits from higher volatility, then commodity markets could be right for you. However, it must be remembered that with higher volatility comes potentially higher risk and the possibility of larger losses. Also, commodity markets won’t be as attractive if your trading style doesn’t benefit from higher levels of volatility.

The rate at which you can sell the base currency, in our case it’s the Euro, and buy the quote currency, i.e the Japanese Yen.

Ask (or Offer)
The rate at which you can buy the base currency, in our case the British Pound, and sell the quoted currency, i.e. the Japanese Yen.

The difference between the Bid and the Ask prices.

Currency rate
The value of one currency expressed in terms of another. Its fluctuation depends on numerous factors including the supply and demand on the market and/or open market operations by a government or by a central bank.

Usually contract size is based on a lot system, and for most currency pairs 1 lot is 100,000 units of a base currency.

Minimum rate fluctuation

Account types
Hantec Markets offer a variety of live and demo trading accounts including Joint and Corporate accounts.

Still unsure where to start?

Head to our learning hub or contact us about opening an account

Examples of some of the major global commodity exchanges and markets

There are now more than 50 global commodity exchanges trading in over 100 commodity types. These exchanges offer futures contracts primarily, with commodities as the underlying asset. 

  • The Chicago Board of Trade (CBoT) has been in existence since 1848 and offers trading in soybeans, wheat and corn, amongst many others.
  • The Chicago Mercantile Exchange (CME) facilitates trading in lean hogs, cattle and lumber, with many other markets also listed to trade.
  • The New York Mercantile Exchange (NYMEX) sees trading in gold, silver and other precious metals plus many others.
  • The London Metals Exchange (LME) sees trading in base metals, including copper, aluminium, lead and zinc.
  • The Tokyo Commodity Exchange (TOCOM) allows for trading in a wide variety of commodities.

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