Trading commodities is very popular due to the choice commodities offer and their diversity regarding what affects their prices. Initially, commodities were traded between themselves.
However, as economies and societies grew, so did the use of commodities. Today commodity trading is immensely popular as it is relatively easy to understand, driven largely by supply and demand. Since commodities tend to stay stable or even go up when stock prices go down, commodities play major role in portfolio diversification and risk management.
| Instrument | Typical Spread | Value of 1 lot | Trading hours (GMT+2) |
|---|---|---|---|
| ALUMINUM | 18 | 50 | 08:30-19:30 |
| COCOA | 14 | 10 | 10:45-19:30 |
| COFFEE | 80 | 2000 | 10:15-19:30 |
| COPPER | 50 | 30 | 08:30-19:30 |
| CORN | 200 | 500 | 02:05-14:45, 15:35-20:00 |
| COTTON | 30 | 500 | 08:30-20:20 |
| GOLD | 160 | 100 | 00:00-23:00 |
| NATGAS | 25 | 30000 | 08:30-23:00 |
| NICKEL | 135 | 10 | 08:30-19:30 |
| OIL | 10 | 1000 | 02:05-23:00 |
| OIL.WTI | 9 | 1000 | 00:05.23:00 |
| PLATINUM | 100 | 150 | 00:00-23:00 |
| SILVER | 140 | 5000 | 00:00-23:00 |
| SOYBEAN | 500 | 300 | 02:05-14:45, 15:35-20:00 |
| SUGAR | 7 | 1120 | 09:30-19:00 |
| WHEAT | 250 | 400 | 02:05-14:45, 15:35-20:00 |
| ZINC | 20 | 50 | 08:30-19:30 |
What are commodities?
A commodity market is a market that trades in the primary economic sector rather than manufactured products, such as cocoa, wheat, corn and sugar. Hard commodities are mined, such as gold and crude oil. Futures contracts are the oldest way of investing in commodities.
What are advantages of trading commodities?
There are 3 main reasons to trade commodities futures:
Higher growth opportunities. An apace increasing demands for an artifact will see will increase in costs considerably from time to time. It provides plenty of opportunities to form fast financial gain through artifact investment.
Diversification. Diversification is after you invest during a sort of industries that offer results otherwise to changes within the market. It'll keep your annual profit stable and additionally avoid huge losses. If you're trying to hedge against your stock and bond investments, finance in commodities may be the proper possibility for you to manage risk within the securities market.
Offer security against inflation. By keeping some commodities in your investment portfolio, you'll be able to benefit of a market upswing.
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.
What moves prices in commodity markets?
When negotiating the commodities market, traders should consider a variety of factors, such as: Supply and Demand, Macroeconomic Performance, Politics, Behaviour of Other Traders in the Market.
How are commodities split?
Commodities are split into two types: hard and soft commodities. Hard commodities are typically natural resources that must be mined or extracted—such as gold, rubber, and oil, whereas soft commodities are agricultural products or livestock—such as corn, wheat, coffee, sugar, soybeans, and pork.