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Commodities Trading

The commodity market is almost as commonly used as the stock market. Usually, one can notice a substantial flux in commodities and their prices due to micro and macro-economic factors.

For example- Agro-commodities and their prices are conditional to climatic conditions. Whereas metals waver based on their demand and supply ratio. The current annual turnover of the commodity market is around $21.71 Billion.


How does the commodity market work?

Commodity Market is a blend of spot and futures trading with future options, forward and spot prices. Subsequently, the prices of the various commodities are set. Simply put, the price is calculated according to the speculators’ mindset along with the demand/supply.

Physical commodities are purchased in cash or spot and sold at a negotiable price.

Commodities are categorized into hard and soft commodities, and some of the significant hard commodities are oil and gold, while the soft ones are wheat, coffee, cocoa, and sugar.

The commodities market and its exchanges occur according to international associations’ regulations, which proves to be advantageous for both buyers and sellers. Additionally, the commodity market is simpler to understand for beginners.

Range of Commodities

With XFlow Markets, you can trade in diverse commodities like metals/energy products/agricultural commodities.

Here is some essential information about these commodities:-

Metals: Metals are an excellent investment in the commodities market as they provide good returns. The two types amongst metals are precious metals and industrial metals.

Agricultural Products: Agro commodities are one of the most pivotal pillars of humankind and its existence. Since the agriculture sector encompasses more than 36% of the world’s workers, most of the world is reliant. XFlow Markets clients can trade in the bulk of commodities like cocoa, soybean, cotton, sugar, corn, and wheat.

 

  • GOLD
  • SILVER
  • PLATINUM
  • COPPER
  • ZINC
  • NICKEL
  • ALUMINIUM
  • COFFEE
  • COCOA
  • WHEAT
  • CORN
  • SOYBEAN
  • COTTON
  • SUGAR
  • NATURAL GAS
  • OIL WTI
  • OILs
 

Why Trade Commodities?

Trading in commodities has minimal transaction values, trading time, and minor margins, compared to forex markets. The profit depends entirely upon your trading skill, systematic market evaluation, and appropriately placing a trade. Some commodities show little movement, while others are highly volatile. You can choose how and when to execute a trade according to its bullish/bearish trends.

Benefits of Commodity Trading

  • Safe heaven instrument

    Many precious metals like platinum, silver, and gold, generally safeguard your position from inflation and an uncertain economy. While you invest in other volatile instruments, the part of your funds you have invested in these commodities can act as your safety net.

  • Diversified Portfolios

    You can diversify their portfolio by investing in commodities as this market functions differently compared to the stock or currency market. In uncertain conditions like the stock market crashing, you will sustain a part of your investment.

  • Transparency

    The commodity market is remarkably transparent, especially with the future market due to the viable, fair price and active participation of the traders and investors. If you research thoroughly and invest wisely, your trades made in this market can fetch astonishing returns.

  • Profitable Returns

    Risk-taking enables profit-making. This motto can help traders to capitalize on this price volatility. But the large-cap companies either shoot up or collapse down with heavy losses.

  • Hedging

    Hedging proves to be an excellent strategy for protection over inflation and other extreme movements in the market. The price of commodities can rise due to inflation when investors sell their bonds and stocks, and hedging can help minimize the loss.

  • Global Exposure

    The international market gives you an opportunity to trade in commodities which may not be available in your country or area. Now traders are not restricted to commodities in and around their location. They can invest in all commodities which are mined from any other part of the world.

  • Managing the risk

    The commodities market can also be quite volatile, according to global events. Therefore, the exchange is the middle ground for safeguarding counterparty risks to investors.

Why trade commodities with XFlow Markets?

While many brokers worldwide offer a platform for commodities trading, here are some of the perks you will have when you trade with XFlow Markets.

  • Your Choice of Spreads
  • Deep Liquidity
  • No Requotes
  • No Charges With Guaranteed Stop Loss
  • Unlimited Number of Trades
  • 30+ Products, Across 6 Sectors.

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Commodities Trading FAQs

  • Why invest in commodities?

    Commodities consent a portfolio to mend total return at the same level of risk. One of the leading based U.S. based authority Ibbotson Associates, on asset allocation projected that commodities increased returns between 133 and 188 basis points, at no extra risk.

  • Who regulates the commodities market?

    Commodity Futures Trading Commission (CFTC) is the prime regulator of commodities and future markets. The CFTC is an independent agency of the US government which was created in 1974. Apart from this, the Commodities Exchange Act prohibits falsified conduct in the trading of future contracts.

  • What is the difference between a long and short position in the market?

    A short position consists of selling future contracts or selling of cash commodities without balancing future transactions. (A cash commodity is a genuine, physical commodity someone is buying or selling, like corn or soybeans, also referred to as actual.) A long position includes buying future contracts or possessing the cash commodities.

  • What is Hedging and Speculation?

    Hedging is when you use an instrument for price defense comprising the balancing of price-change danger in any cash market position by taking an equal, but differing position in the same market. Whereas Speculating is buying and selling an instrument, especially future & options contracts to make a profit. A speculator will buy and sell by according to his guessed future price movements, but has no intension to essentially possess the physical commodity. Therefore, speculators assume market price risk and add liquidity and capital to the future markets.

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XFlow Markets provides an entirely transparent access to the FOREX Market through two powerful trading platforms (XFLOW & MT4) with excellent execution speed, a 24/5 client support system with no dealing desk involvement.

© 2020 XFlow Markets LLC, All rights reserved.

Risk Warning: Leveraged trading in foreign currency contracts or other off-exchange products on margin carries a high level of risk and may not be suitable for everyone. We advise you to carefully consider whether trading is appropriate for you in light of your personal circumstances.

You may lose more than you invest. Information on this website is general in nature. We recommend that you seek independent financial advice and ensure you fully understand the risks involved before trading. Trading through an online platform carries additional risks.

XFlow Markets does not offer Contracts for Difference to residents of certain jurisdictions including the Belgium, Iran, Canada, North Korea, the USA, Cuba, Syria and FATF Black Listed Countries.

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  • Regulated by FSA

    XFlow Markets is not required to hold any financial services license or authorization in Saint Vincent and the Grenadines to offer its products and services.

XFlow Markets is incorporated in Saint Vincent and the Grenadines with registration no. 255 LLC governed by the Limited Liability Companies Act Chapter 151, registered by the Financial Service Authority of Saint Vincent and the Grenadines.

Telephone number: +44 20 3966 8838 Working hours: 7:00 AM - 5:00 PM (GMT+0)