Commodities CFD trading is a trading strategy involving the commodities market that involves buying and selling different contracts at the same time to make a profit on the price difference or spread. This trading strategy aims to take advantage of the price differences between different contracts rather than relying on the price direction of the market as a whole. Commodities CFD trading usually requires an in-depth understanding of the fundamental and technical factors of the market and the underlying commodities, such as focusing on market dynamics, supply and demand, seasonal factors, etc., in order to make an effective trading strategy.

Generally, (commodities) futures have an expiry date and traders are obliged to buy and sell an asset at a predetermined price on the futures expiry date. Commodities CFD is different in that there is no expiry date, the contract can be terminated at any time at the trader's discretion and the trader never owns the underlying asset. Commodities CFD trading is more focused on exploiting price differences, futures trading is more concerned with overall market trends.

Commodity market trading hours are effectively 24 hours a day, five days a week (most markets are closed from Friday evening to Sunday), depending on the market you choose. Commodities CFD trading is available 24/7 at NIYAFA FX.

Commodity prices are mainly affected by global economic status, monetary policy, supply and demand in the commodity industry, geopolitics, speculative factors, etc. The market is cyclical and seasonal. In the medium to long term, supply and demand have the most direct and significant impact on commodity prices, but short-term speculative factors are also the most significant cause of commodity price volatility.

Commodities CFD trading provides advantages such as hedging risk through simultaneous buying and selling of different contracts, allowing investors to mitigate the impact of market volatility. It offers flexibility with choices in delivery dates, commodities, and markets, enabling investors to adjust their strategy based on market changes. CFD on commodities focus on exploiting price differences rather than market direction, presenting a market-neutral approach. However, they are still susceptible to overall market volatility, market risks, and potential costs and liquidity issues. Traders should carefully assess their investment goals, risk tolerance, and market knowledge to effectively leverage the benefits and manage drawbacks when opting for commodity CFD trading.

Participants in the commodities market include producers, wholesale retailers, speculators, hedgers, brokers and others. These participants play different roles in the market, e.g. producers and wholesale retailers participate in order to hedge their price risk, speculators gain from price volatility through contracts, and financial institutions (brokers) provide CFD trading and financing services for commodities.

NIYAFA FX currently offers CFD trading in 20+ popular commodities around the world, mainly including energy and precious metals, such as UKOIL, USOIL, XAG, XAL, XAU, etc.