Commodities have a much longer history than Forex or stocks and are an important part of everyday life. They are the goods and materials we use to create the world we live in such as energy, metals, livestock and agriculture. Commodities are vital to the global economy and most of them can be traded through futures contracts or by buying shares of companies that process a certain commodity.
Commodities are traded not in shares but in contract sizes. Before a certain commodity can be traded on a capital market its price and quality must be meticulously determined. You can buy and sell futures contracts at your convenience, so you never need to worry about a truckload of wheat being delivered to your front porch.
Commodity trading explained
Trading commodities often works as a hedge against inflation or unfavorable conditions of the market (e.g. a monsoon- if we’re talking about farming). Another example of a traded commodity is gold. Gold can be used as a hedge in the event a currency depreciate or an economy collapse.
The most popular way to trade commodities is through a futures contract on a specialized exchange. The futures contract is an agreement to buy or sell an amount of a commodity at a specified time and price. By doing this, big businesses who use a certain commodity can protect themselves from disastrous price swings.
How to trade
To start trading simply create an account with Double.Trade, deposit funds to the account, sign-in to the app and go for it.
When trading commodities you must meet a minimum balance requirement. After you have put in the required amount, you need to think about your investment strategy. Do you want exposure to a variety of commodities to diversify your portfolio? Do you want to make a profit on the performance of a certain commodity? Upon trading, you will choose: the commodity you want to purchase, the month when the contract expires and the number of contracts.
Why trade Commodities?
Double.Trade makes sure you trade under the most advantageous conditions
Personal Trading Assistant
Highly qualified Double Trade’s trading assistants are there to answer your questions 24/5. What is more is that you can speak to an assistant in your preferred language.
One advantage of purchasing commodities futures or CFDs is they are primarily long-term investments. Quite simply, this saves you time because you don’t need to monitor markets and prices every day.
When trading in commodities, the trader is trying to make a profit on the differences in the value of underlying assets. If a trader reaches a determines extreme, all trading will be blocked.
Trade all commodity types
Double Trade gives you a chance to trade precious metals, oil, petrol, livestock and agricultural produce.