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Trade the Basic Commodities of Life
Commodities are basic to our daily life, which makes the commodity futures markets among the largest, with huge trading volumes. Binary options and call spreads give you a different way to trade commodities—with limited risk and a lower cost of entry. You can never be stopped out or get a margin call.
Nadex offers binaries on these metals, energies and agricultural products:
- Metal: gold, silver, copper
- Energy: crude oil and natural gas
- Agricultural: corn and soybeans
Trade all the markets you love
Trade These Markets with Binary Options and Call Spreads
Nadex contracts in gold, silver, and copper are based on COMEX/NYMEX® futures prices.
Nadex contracts in crude oil and natural gas are based on NYMEX® futures prices.
Nadex contracts in corn and soybeans are based on CBOT® futures prices.
Make Volatility Your Ally
In 2020, the price of crude oil fell by more than half. Oil-dependent economies like Russia’s suffered, while consumers enjoyed lower gas prices. Volatility was widespread.
Most traders are not prepared or lack the capital to trade commodity futures alongside the big players, especially when things are volatile.
With Nadex binary options and call spreads, you trade commodity futures prices with smaller risk. You set your maximum possible loss before you enter the trade. If the market spikes against your position, your loss is limited and you won’t get stopped out even if your binary’s value goes to zero.
With Nadex Binary Options and Call Spreads, you can exit the trade prior to expiration, to take profits or avoid taking the maximum loss.
Small Opening Balance, Big Opportunity
Most successful traders start off small, with the goal of learning and improving. However, in the world of commodity futures, small accounts face a lot of challenges. Most commodity trading educators assume you have $25,000 or more to start with, so that you can handle drawdowns of several thousand dollars and still come out on top.
While that works for some, many traders want a different risk/reward profile, even if they have ample funds. That’s why we require a low initial deposit to fund your account (though most of our members do start with more). That’s also why we don’t promise “unlimited profit potential.” We have found that most traders are comfortable with capped profit in exchange for limited risk.
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Protection of a Stop-Loss, Without Getting Stopped Out
Commodity traders traditionally use stop-loss orders to limit risk. However, even with a stop, you still have the risk of slippage. You may incur a greater loss than you were prepared for or even get a margin call.
With binary options and call spreads, your maximum risk is set before you enter the trade. No unpleasant surprises if a trade doesn’t go your way. In fact, Nadex doesn’t issue margin calls.
Nadex Binary Options and Call Spreads give you staying power in fast-moving, volatile markets. Most traders know the frustration of having the market move against you, getting stopped out, and watching it move back into profit territory. With Nadex, you don’t get stopped out, ever. If and when the market comes back, you’re still in the trade. You can exit when you decide or hold to expiration.
Trend-Follower? You’ll Love Nadex Call Spreads
Most successful traders are trend followers in one form or another. However a longer trend can contain big fluctuations. What if you could trade only the part of the trend where you think the greatest profit potential is? And if the price went below that range, you would not lose more money nor would you get stopped out?
Nadex Call Spreads let you trade a trend with that built-in floor and ceiling to protect you. Yes, your profit is no longer theoretically “unlimited,” but neither is your risk. That’s a trade-off many traders are happy to make, especially when it allows them to participate in lucrative markets like oil and gold, without all the stress that can come with it.
How to Trade Commodities
Updated: March 29, 2020 | References
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Commodities are standardized products, such as oil, gold, and copper, that are generally used in manufacturing processes around the world. Commodities, and their related financial products, are traded on exchanges between investors and financial institutions. Commodities traders seek to profit from quick changes in the price of these commodities or financial products. Thanks to the internet, these commodities can also be traded online. However, before trading commodities on your own, you’ll need a strong understanding of the market and a high risk tolerance.
This page covers the major commodities that are most attractive to traders worldwide: gold, silver, crude oil and copper. Keep reading to view live commodity prices, commodity market news and to learn about fundamental factors that can impact commodities prices.
Live Commodity Prices
What are Commodities?
Commodities are raw materials or agricultural products that can be bought and sold, with examples being gold, Natural Gas and wheat. From Copper to corn, coal to crude oil, commodities are central to life – and the lives of billions of people around the world are affected by their price fluctuations.
There are two ways to trade commodities – buying and selling via exchanges, or trading them using derivatives such as binary options, CFDs and spread bets (where permitted). The most liquid commodities markets in the US include crude oil, Natural Gas, and RBOB gasoline, as well as soft commodities such as sugar and wheat. When it comes to a global outlook, steel, aluminum and iron are some of the most traded commodities by volume.
What are the Most Traded Commodities worldwide?
By trading volume, the top commodities include gold, silver, US Crude Oil, Brent Crude, copper, and Natural Gas. Products such as coffee, wheat and sugar are also featured on the list of most traded commodities. Here are some of the major ones to consider:
For thousands of years, gold has been a highly valued metal. Rising gold prices may signal political upheaval or uncertainty, due to investors turning to the precious metal as a safe-haven asset when other financial instruments are struggling.
A precious metal with applications in silverware, electronics and jewelry, the price of silver, like all raw materials, is affected by supply and demand balances. Traders may find that silver represents a popular hedge against inflation due to its inverse relationship with the US Dollar, and its high liquidity means silver is a very tradeable commodity.
Crude oil, a naturally occurring fossil fuel formed from ancient organic matter, is of interest particularly to swing and day traders, who seek to take advantage of quick market fluctuations. Crude oil is refined into petroleum products such as gasoline, diesel, solvents and kerosene, which in turn have applications ranging from jet fuel to heating oil for boilers and furnaces.
With utilities ranging from fertilizer to electric wiring, Copper is one of the most widely used metals. It is also widely available, meaning that its value is linked to its industrial applications rather than its supply. The price of copper can be linked to economic health, so traders often take a position based on their view of world growth and GDP.
Natural Gas, like crude oil, is a fossil fuel formed over millions of years from the remains of plants and animals. Traders are attracted to Natural Gas due to factors including growth potential and demand for clean energy.
Coffee is classified as part of the soft commodities group including the likes of cocoa, sugar and orange juice. When it comes to trading, coffee is one of the most volatile commodities because its supply is dependent on agriculture in developing and emerging economies, while demand is highest in Western markets.
What is Commodity Trading?
Commodity trading can mean two things – buying and selling commodities via exchanges, or trading them via derivatives (where permitted).
Some commodities are more tradeable than others. For example, markets such as orange juice, oats and feeder cattle are less liquidity – such markets often prohibit speculators from entering or exiting a trade at the point they would like to. An example of a more tradeable commodity is Natural Gas, with crude oil and corn also considered liquid markets.
When trading commodities, speculators should consider factors such as the level of volatility associated with the trade, the aforementioned liquidity of the market, and other factors that influence price movements, listed below.
Why Trade Commodities?
The commodities market is attractive to traders because it can offer:
A Safe Haven
Certain commodities, such as gold, can be a sensible investment in times of market turbulence. This is due to the likelihood of the asset retaining its value – or even increasing in price – during challenging economic conditions.
The dramatic swings in commodity prices mean that, with the right knowledge, traders can take advantages of price movements in liquid markets.
A Diversified Portfolio
Broad exposure to commodities can be a good source of portfolio diversification, as they collectively show low correlations with equities and bonds.
What Moves Prices in Commodity Markets?
When negotiating the commodities market, traders should consider a variety of factors, such as:
A lower supply of a commodity tends to mean the price of that commodity will rise, and a higher supply conversely means the price is likely to fall. The variables affecting supply include:
- Seasonality: for example, for agricultural products
- Movements in production costs: for example, as a result of increased efficiencies, technological investment or operational changes
- Changes in the competitive landscape: for example, if new producers enter or existing producers leave the market
While oversupply (supply exceeding demand) may push down prices, demand becoming greater than supply can cause a shortage which can raise prices again. The rapid fluctuations that can result means those trading commodities should keep up to date with supply and demand conditions.
A struggling wider economy can result in stunted consumer spending, meaning some commodity prices may fall. Conversely, a booming economy may result in increased demand for certain commodities, which could lead to higher prices until supply catches up.
Political events have the power to shift prices. For example, export and import policies can have a significant impact on commodity prices. For instance, if a government increased import duty on crude oil, that could push up the price of the commodity.
Speculators all have access to the same charts, meaning particular reactions to a pattern may cause a herd of buying or selling that can also influence prices.
Get access to Commodity trading with ITRADER ennjoying a wide variety of assets:
- Trade different metals like Platinum, Copper or even precious metals like Silver and Gold
- Clients can also trade in Agricultural commodities like Coffee, Sugar and Cocoa
- Trading a diverse variety of energy assets
All commodities can be traded at zero cost and being we, the ITRADER want what’s best for our clients, so we make sure that you can enjoy 100% of your investments, meaning we do not charge our customers any commissions, which will allow you to focus more on your trading and less on the platform.
By choosing to engage in commodity trading with us, you will receive the assistance of a dedicated, professional, and available 24/7 customer support team, who’s prepared to help you with any inquiry.
Since trading hours for raw materials may vary, we have prepared a list of trading hours, so our clients can learn about the trading schedule and suit it to its preferences.
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Due to regional restrictions, we can’t offer services for US, Canada, and some other residents.
CFDs are complex instruments and carry high level of risk to your capital due to leverage. Trading on such instruments may not be suitable for all investors, so please ensure that you fully understand the risks involved. Please seek independent advice if necessary considering your investment objectives and level of experience. You should not risk more than you are prepared to lose. Please ensure you read through our terms and conditions carefully before making CFD’s/Forex investments.
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