SPREAD BETTING ONCommodities Comparison 2018
Compare Commodities Trading Across The Top UK Spread Betting Brokers And Start Trading Today!
| Broker | Gold- Spreads From | Gold- Margin | Trade Minimum | Account Minimum | Highlights | Mobile Trading | Visit Site |
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 | 0.6 | 20:1 | £1 | £500 |
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 | 0.5 | undefined | £0.1 | £100 |
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 | 0.4 | 0.5% | £1 | £0 |
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 | 0.5 | 0.5% | £0.50p | £100 (suggested) |
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 | 0.3 | 20:1 | £0.10 | £100 |
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 | Variable | Dynamic | Per instrument | 100€ |
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* Plus500 is a CFD service.
What are Commodities?
Commodities are physical products that can be traded on international financial exchanges. Hard and soft commodities are typically traded on futures markets through the use of futures contracts. Established financial exchanges such as Euronext, and Intercontinental Exchange (ICE) are popular venues for commodities trading.
One characteristic of commodities trading is that it doesn’t matter who produces the commodity; there is uniformity despite the differences. There are 4 essential categories of commodities including soft commodities (agricultural commodities), energy, precious metals, and non-precious metals.
The most popular agricultural commodities include corn, wheat, soy, cocoa, and milk. Metals include precious metals and nonprecious metals such as gold, silver, copper, platinum, steel, and iron ore. Energy commodities such as natural gas, coal, and crude oil are hugely popular among traders.
How to Trade Commodities
Commodities trading is done on futures markets through futures contracts. These short-term contracts have fixed expiry dates. The seller agrees to deliver a set quantity of a hard or soft commodity at a specific date in the future. The price is also determined ahead of time. The buyer will then agree to purchase the product, and to make payment by the specified date.
Futures markets connect buyers and sellers of commodities seeking to trade futures contracts. To get started, a minimum deposit is required, and a trader will need to open a brokerage account. Commodity prices are continually fluctuating, meaning that the value of the contract will change during the contract period.
There is another way to trade commodities, notably through equities markets via ETFs, CFDs, and mutual funds. It should be pointed out that most commodity traders have no interest in acquiring and holding popular commodities like wheat, corn, soy, milk, crude oil, gold, steel, or iron ore.
They are simply rolling over futures contracts on that specific commodity. A rollover will extend the expiration date for settlement (payment) of the contract, thereby allowing the commodities trader to forgo the costs of settling that expired futures contract.
Why Spread Bet on Commodities?
Spread betting is a popular option for trading commodities like gold, silver, crude oil, coal and the like. In fact, there are many unique advantages to spread betting over traditional futures trading. It should be noted that spread betting transactions are not available for resale and there is no inherent value in them.
If you’re looking to generate profits off price movements of commodities, spread betting is the way to go. It is cost effective, utilizes maximum leverage, and is associated with minimal obstacles. Remember, commodities are driven by supply/demand considerations.
Geopolitical events will have an instantaneous impact on demand for commodities, and this makes it a great financial instrument to trade for traders who understand market movements. A basic understanding of macroeconomic variables, and current affairs, will assist traders in making profitable trading decisions with spread betting on commodities.
When you spread bet, you need a much smaller margin (cash value in your account) to trade a significant quantity of commodities. This means that your profits can be magnified exponentially, but it can work in the other direction too.
How to Choose a Spread Betting Company for Commodities Trading
Spread betting companies must be selected on merit. Various factors need to be considered such as credibility, licensing and regulation, range of commodities available (precious metals, nonprecious metals, energy commodities, agricultural commodities etc.), leverage, margin requirements, trading platform and the like.
We recommend choosing fully licensed and regulated spread betting brokerages with an established reputation in the United Kingdom. A trading platform which allows you to spread bets on PC, smartphone and tablet (iOS and android) is preferred. MetaTrader 4 and MetaTrader 5 are the ranking spread betting platforms for CFD trading on commodities.
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