COMMODITIES TRADING

What is Commodities Trading?

Commodities are the raw materials used to produce goods and are usually categorised into hard and soft commodities. Hard commodities are natural resources that need to be mined or refined, such as precious metals like gold and silver and energy sources like oil and natural gas. Soft commodities, on the other hand, are agricultural products and livestock that need to be grown or raised, such as corn, wheat, and pork.

Commodities trading refers to the buying, selling, and trading of raw materials for commodities, mainly through spot and derivatives (e.g., forwards, futures, CFDs, etc.) trading. As derivatives trading does not involve the physical delivery of commodities, commodity derivatives trading is very popular in the market. NIYAFA FX currently offers CFD trading in 20+ popular commodities, such as gold, silver, oil, copper, zinc, etc. NIYAFA FX combines the best market prices and flexible trading platforms to provide traders with excellent commodity CFD trading services.

Benefits of Commodities CFD Trading.

As commodities are essential for everyday production and consumption, the market in which it is traded usually has deeper liquidity and flexibility than other financial markets. Here are some of the main benefits of Commodities CFD:

  • No physical Delivery: Commodities CFD is traded on the basis of an expectation of the price of the commodity, without the trader having to physically purchase (or deliver) the underlying asset. A trader can take a short position (expecting the price to fall) or a long position (expecting the price to rise) in the same commodity, so there is an opportunity to profit regardless of how the price of the commodity moves. This provides CFD traders with greater flexibility and more opportunities to profit from the market.
  • Leverage: Commodity CFD typically offers higher leverage ratios, allowing traders to make large trades with smaller amounts of funds and take advantage of profitable investment opportunities.
  • Market Liquidity: Commodity market is often regarded as highly liquid and, unlike commodity futures counterparts, CFD can be closed out at any time at the spot price.
  • Portfolio Hedging: Commodities CFD is a great way to hedge an existing portfolio, offsetting the amount of portfolio losses by hedging long and short positions in the underlying security.

Overall, commodities CFD offers traders a flexible way to participate in the volatility of commodities, but before doing so, traders should fully understand the market and be clear about their investment objectives and risk tolerance.

How to Start Trading Commodities CFD?

Trading commodities requires expertise and can be riskier than trading more traditional assets such as indices and stocks, especially during periods of market volatility. Jumpstart your Commodities CFD trading journey by following these steps:

  • Understanding Commodities: While trading CFD on commodities is not very complicated, it does require financial expertise and continuous learning about the commodities markets. CFD trading involves margins, leverage, spreads, and more, and traders need to have a clear understanding of these before investing.
  • Choosing a trading platform: Before you start Commodities CFD trading, you need to choose a compliant, secure, and transparent trading platform to open an account.
  • Making a trading strategy: While traders are not always able to predict and grasp the market trend, having a set of trading strategies will provide comprehensive guidance and a roadmap for your trading, to a certain extent, to reduce the risk of your Commodities CFD trading.
  • Stay on top of market data: Once you start trading, regularly check your positions at the end of every day. Most trading software provides a daily trade history. Confirm that you have no open position orders and make sure you have enough cash in your account for future trades.
  • Stay on top of market news: Once you start trading, you will need to keep an eye on the global economy, the monetary policies of central banks, the supply and demand of the commodities industry, and the cycles of the commodities market on a daily basis in order to forecast the volatility of the market.
  • Keep emotional stability: CFD trading is often accompanied by mood swings and unanswered questions.

NIYAFA FX Commodities CFD

NIYAFA FX is a compliant and secure online trading platform offering traders CFD services on popular global commodities such as Gold, Oil, Silver, Zinc and 20+ of the most liquid commodities (energy, metals). When trading on the NIYAFA trading station, we offer competitive spreads, security of funds, risk management, and highly competitive pricing from multiple liquidity providers.

NIYAFA trading station provides traders with an instant platform for Commodities CFD trading, through which traders can view real-time trading prices and make buying and selling orders.  Traders can also customise their trading interface according to their needs. In addition, risk management tools, decision support tools, financial news, sophisticated back-end management system, highly strategic and friendly interface design, information systems, etc. have an external strategic conception and friendly use of the environment, all of which provide NIYAFA FX users with convenient and efficient services.

FAQ

What is Commodities CFD Trading?

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What is the difference between Commodities CFD and futures?

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Commodities CFD Trading Time

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What factors affect commodity volatility?

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Pros and Cons of Commodities CFD Trading

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Who trades CFD on Commodities?

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What Commodities CFD does NIYAFA FX offer?

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NIYAFA FX

950 17th St, Denver, CO 80202, US

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Losses can exceed deposits on margin products. Please ensure you understand the risks.

NIYAFA FX is the trading name of NIYAFAFX ltd, which is regulated by the Money Services Business (MSB) with Securities Dealer’s license number 31000289167268.

Risk Warning: Trading Forex and CFDs carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Forex and CFDs may not be suitable for all investors, so please ensure that you fully understand the risks involved and seek independent advice if necessary. Please read and ensure you fully understand our Risk Disclosure.

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You must be 18 years old, or of legal age as determined in your country. Upon registering an account with NIYAFAFX Ltd, you acknowledge that you are registering at your own free will, without solicitation on behalf of NIYAFAFX Ltd.

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