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.
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.
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.
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.
Commodities are a vital part of a balanced portfolio model
In particular, the price of oil is a key factor in the global economy
Oil markets often trend well, which can offer good trading opportunities
Access the Hantec Markets MetaTrader4 platform, an award-winning technology available on desktop, mobile and Mac.
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.
The Hantec Markets Group of companies has been servicing traders since 1990
Use our wide range of educational resources to further your trading strategy
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 fall broadly into two categories: hard and soft commodities.
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
There are three main reasons why you should consider looking at commodities markets:
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.
Bid
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.
Spreads
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.
Lot
Usually contract size is based on a lot system, and for most currency pairs 1 lot is 100,000 units of a base currency.
Pip
Minimum rate fluctuation
Account types
Hantec Markets offer a variety of live and demo trading accounts including Joint and Corporate accounts.
Head to our learning hub or contact us about opening an account
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.
Support your trading strategy with our daily reports and analysis conducted by our chief analyst, Richard Perry
You can contact us anytime the markets are open, we’re here 24 hours a day 5 days a week
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.
Please click here to view our Risk Disclosure.
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Authorised and Regulated by the
Financial Conduct Authority (FCA)
Regulated by the Financial Services Commission of Mauritius (FSC)
Regulated by the Jordan Securities Commission (JSC)