Those who stock their portfolio with various asset classes can achieve risk diversification. Profitable investments are usually the most risky. Online commodities trading is an investment opportunity that can also prove attractive to private investors. Trading commodities can be done with CFDs on commodities, but funds can also be invested in commodities. Investments can be made in commodity indices via ETFs and futures trading also offers other options for experienced investors. As with other markets, the commodities market has risks that investors should be aware of. Also of interest is the choice of financial product with which investors want to invest in the price development of raw materials.
Table of contents
- Commodity stocks: Trade commodities online
- commodity futures: futures trading for experienced investors
- commodity CFDs: trade with leverage
- commodity ETFs: ETF savings plans on commodities also possible
- Trading binary options on commodities
- Commodities trading: oil, gold, silver, sugar, wheat and Co.
- Important stock exchanges for commodities trading
- The right online broker Select
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Commodity stocks: trade commodities online
To be able to implement online commodity trading, investors first need a deposit. Before the custody account is opened, it is important that information is gathered regarding the conditions and services that the respective online broker offers. The purchased commodity shares can be kept in the custody account along with other online securities. A single depot can be opened, but also a joint depot. As with other stocks, investors should also find out about the price development before buying or selling commodity shares.
So that a portfolio that contains commodity stocks proves to be solid, it is advisable to only trade with an effective strategy. Anyone considering investing in the commodities sector through equities should be aware that this sector can show above-average fluctuations. Anyone who stocks the depot with commodity stocks must keep up to date with the current developments on the market in order to be able to react quickly if necessary. The selection must be correct so that commodity stocks also prove their worth in the portfolio over the long term.
If you want to put together a balanced portfolio that is made up of different asset classes, you can also use commodity Titles are right. However, the sector shows volatility that not only brings opportunities but also risks. Therefore, the selection of commodity stocks should be done carefully. For example, current news about a commodity company can present itself as a valuable source of information in order to better assess the development of the course.
Commodity futures: futures trading for experienced investors
The price development in online raw materials trading is not predictable. Unexpected changes can result in losses for investors. Other asset classes are also associated with risk. However, some of them prove to be less risky, which is also reflected in the expected return. If you want to achieve a high return, you also have to take the corresponding risk. Investors who want to invest in commodity futures must understand the function in order to be able to correctly assess opportunities and risks. Inexperienced investors in particular should consider carefully whether an investment in commodity futures actually fits.
Trading commodities online with futures can be done on precious metals, but also on base metals. Likewise, Natural gas and electricity futures or futures on cereals are traded. In order to achieve an attractive return on trading in commodity futures, resale must take place before the expiry date at a profit. When trading in commodity futures or futures contracts, the delivery of a commodity is determined. Since the raw material should of course not be delivered, a sale must take place before the point of performance.
Trading in raw material futures can sometimes be quite complicated. Beginners with a lack of knowledge of the market and how forward contracts work cannot assess the opportunities and risks sufficiently well. For experienced investors, on the other hand, commodity futures can present themselves as an opportunity. However, professionals should also weigh it up.
Trade the test winner DEGIRO now at the stock portfolio CFD trading knows the advantages and disadvantages of leverage. CFDs allow investors to bet on rising and falling prices. Investors who place a falling price on a short trading position and those who place a price on a rising price long. Investing in commodities via CFDs is speculative and the risks are correspondingly high. How extensive the selection of raw materials of a CFD broker depends on the respective broker. The following raw materials can include find in the selection
The costs are determined by the Spread, whereby this can be shown in different amounts for the different raw materials. Commissions may also apply. The margin rates can also differ for the individual raw materials. It should be ensured that the broker presents the margin transparently for each commodity.
Very high returns are possible when investing in commodity CFDs. However, the risk of losing commodities also turns out to be high here, as the leverage works in both directions. When trading CFDs, investors deposit a security (margin). This margin can also be used to move large volumes.
Commodity ETFs: ETF savings plans on commodities are also possible
ETFs (Exchange Traded Funds) are on index funds traded on the stock exchange. The performance of an index is also shown when trading commodities online with ETFs. The advantages of ETF trading can certainly also be found in commodity ETFs. Compared to traditional funds, ETFs show an inexpensive price structure. As a rule, there is no front-end load when trading ETFs. ETFs are passively managed index funds, which has a positive effect on the price structure. Investors can find out the annual costs through the Total Expense Ratio (TER).
In most cases, investments are made in the performance of raw materials via futures. Commodity indices can have a mix of different commodities. The number of raw materials in the raw material basket depends on the selected raw material index. In addition to the number of raw materials, raw material selection also proves to be worth knowing. Not only a one-time investment in commodity ETFs is possible, but also savings in a ETF savings plan. It should be noted that not every commodity ETF in a broker's offer proves to be able to save. ETF savings plans can often be set up with a monthly savings rate starting at 50 euros.
If you want to build up an ETF portfolio with a wide range, you will also find a building block in commodity ETFs. Investing in ETFs is also suitable for small investors, since entry is possible from low investment amounts. Especially with the ETF savings plans, assets can be built up over the long term.
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Trade binary options on commodities
Dem Binary options trading is based on a specific underlying. Commodities represent a possible asset class from which the underlying can come. There are different types of trading when trading binary options. For example, if you trade call and put options on commodities, you bet on rising or falling prices of an underlying. Gold and oil are often among the tradable underlyings that a broker offers. Just like oil, gold is also characterized by high volatility. This aspect makes the two raw materials mentioned interesting for trading in binary options.
In addition to the call and put options, there are also the touch options and the range options under the trading types. The term of a binary option is determined at the opening. Depending on the broker's offer, investors can choose between extremely short, short, medium and long-term terms. The extremely short runtimes include the so-called turbo options, which run for 30 or 60 seconds. But the duration can also last for several hours, days, weeks and up to a year. Anyone who is considering 30- or 60-second trading should be familiar with the market and have experience.
Anyone who sets a call option on oil is betting that that the oil price rises. If the forecast has reached the end of the term, the trader makes a profit. Binary options often show an attractive return, which in regular trading can be between 60% and 85%. However, the risks are also correspondingly high. Brokers that offer a comprehensive catalog of basic assets can also use the raw materials silver, copper, sugar and platinum.
Trading raw materials online with binary options is possible with various brokers. How the selection of tradable underlyings from the commodities asset class proves depends on the underlyings catalog of the respective broker. Due to the volatile nature of commodities, traders should consider the current market situation before a binary option is opened.
Commodity trading: oil, gold, silver, sugar, wheat and co.
The investment product gold is a popular choice in commodities trading. Gold belongs to the group of precious metals. When trading commodities online, investors should differentiate between four groups of commodities. In addition to gold, silver and platinum are also precious metals. Copper and aluminum are also metals. However, the assignment is made to industrial metals. In addition, agricultural raw materials should be mentioned as a further group. Agricultural products such as sugar are included here. Beans, wheat, rice and corn can also be classified in this group. The category of energy raw materials includes different types of crude oil. Various natural gases and heating oil also belong to this group.
It is important that investors have an overview of the tradable raw materials. The raw materials can sometimes have special features that may prove worth knowing for the trade decision. The best-known raw materials are undoubtedly gold and oil. But silver, copper and natural gas are also popular with many investors.
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Important stock exchanges for commodities trading
The stock exchanges naturally play an important role in trading commodities online. The focus is on which raw material can be traded on which exchange. On the largest commodity futures exchanges worldwide, commodities trading mostly takes place using futures contracts. Anyone who has decided to trade in wheat, for example, can implement this via the Chicago Board of Trade (CBOT). In addition to wheat, the raw materials soybean meal, rice and corn are still tradable. Like various other important stock exchanges for commodities trading, the foundation of the CBOT was many years ago. The CBOT was founded in 1848. The following list provides an overview of other stock exchanges where investors can trade commodities:
- London Metal Exchange (LME)
- New York Mercantile Exchange (NYMEX )
- Chicago Mercantile Exchange (CME)
- New York Cotton Exchange (NYCE)
- Inter Continental Exchange (ICE)
- Kansas City Board of Trade ( KCBT)
Investors should first find out about the types of raw materials that can be traded on a stock exchange. The New York Mercantile Exchange (NYMEX) can prove to be a suitable exchange for commodities trading in petrol, gas and oil. The raw material types gold, aluminum, copper and coffee can also be traded there. Lead, tin, aluminum and nickel can be found on the stock exchange London Metal Exchange (LME). Investors can find out interesting information about commodities trading on the website of the respective stock exchange. A visit to the website can therefore be worthwhile to find out how stock exchange trading works.
Investors generally use online commodities trading through futures. Investors do not have to worry about the actual delivery of the raw material, as a “rollover” prevents this. Different types of raw materials can be traded on the various stock exchanges. It is advisable to obtain information about the most important stock exchanges for raw materials.
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Select the right online broker
Various investment products are available for trading in raw materials. Not every broker offers all possible investment products with which commodity trading can be realized. Therefore, investors should first find out about a broker's product range. The selection of tradable raw materials should also be considered. A large catalog of basic values often also has a more extensive selection of raw materials, so that in addition to the classic gold, oil and silver, sugar, coffee and other basic values are also available. The conditions for trading should be listed transparently and completely, so that the costs can be easily overlooked.
Many online brokers offer a free deposit for active traders, which means that no fees for the Depot management can be calculated. How the fee structure for commodities trading is structured depends on the respective investment product and also on the broker. There is a minimum deposit at various brokers, but this can usually also be mastered by small investors. A user-friendly trading platform is of interest to beginners. Some online brokers offer a free demo account, through which the use of the trading platform and the purchase of securities can be tested risk-free.
When choosing a broker, a comparison of the trading conditions and also useful in the catalog of basic values. To find the right broker for commodities trading, a broker comparison can prove to be a useful tool. Here investors will not only find the test winner, but often also test reports on the provider.
Many investors are certainly striving for risk diversification when investing online. Raw materials are also interesting as a building block for the depot. However, this asset class shows volatility that cannot be ignored. Often the choice falls on gold. However, other types of raw materials from the fields of precious metals, industrial metals, energy and agricultural raw materials can also be considered as investment opportunities. Commodity trading with futures and derivatives is often implemented, but the asset class of commodities also plays a role in trading with binary options.