Commodities trading works very similar to FX trading, the exception being obviously the object of trading. As opposed to currencies, in commodities trading the transaction includes goods in these categories: Energy (crude oil, heating oil, natural gas and gasoline), Metals (gold, silver, platinum and copper), Agricultural (corn, wheat, rice, cocoa, coffee etc).
What Are Commodities Commodities are tangible goods that are traded through an exchange as marketable goods. Prices will be affected by a wide range of factors; from supply, demand, geographical and global events.
These products tend to be homogeneous in nature and play a fundamental role in the economy. Volatility can often be seen to increase whenever there are disruptions in the world such as political conflict or unusual weather conditions.
Commodities are popular with investors, in particular Gold, which has long been considered a safe haven. Historically it has held its value during times of uncertainty.
RISK WARNING: CONTRACTS FOR DIFFERENCE (‘CFDS’) ARE COMPLEX FINANCIAL PRODUCTS THAT ARE TRADED ON MARGIN. TRADING FOREX AND CFDS CARRIES A HIGH LEVEL OF RISK SINCE LEVERAGE CAN WORK BOTH TO YOUR ADVANTAGE AND DISADVANTAGE. AS A RESULT, FOREX AND CFDS MAY NOT BE SUITABLE FOR ALL INVESTORS BECAUSE YOU MAY LOSE ALL YOUR INVESTED CAPITAL. YOU SHOULD NOT RISK MORE THAN YOU ARE PREPARED TO LOSE. BEFORE DECIDING TO TRADE, YOU NEED TO ENSURE THAT YOU UNDERSTAND THE RISKS INVOLVED TAKING INTO ACCOUNT YOUR INVESTMENT OBJECTIVES AND LEVEL OF EXPERIENCE. PAST PERFORMANCE OF FOREX AND CFDS IS NOT A RELIABLE INDICATOR OF FUTURE RESULTS. MOST CFDS HAVE NO SET MATURITY DATE. HENCE, A CFD POSITION MATURES ON THE DATE YOU CHOOSE TO CLOSE AN EXISTING OPEN POSITION. SEEK INDEPENDENT ADVICE, IF NECESSARY.
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