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Commodities

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When you embark upon your commodities trading journey, there are a number of things to keep in mind that may help you to make incisive decisions. Here are a few examples to consider;


THE RISKS OF TRADING COMMODITIES


The Risks of Trading Commodities

The Risks of Trading Commodities

Regardless of whether a given commodity generally experiences low volatility or not, commodities’ trading does come with a fair share of risk. After all, it is unrealistic when trading to expect to earn above-average profits from investments without taking above-average risks. It’s just important to be aware of those risks and try to manage them as best as possible.

Unexpected situations can result in unpredicted losses –  for example, natural disasters or government currency interventions can cause major market movements. A trader can aim to avoid these kinds of risks by attentively monitoring relevant news events. However, the best way to manage unpredictable risks is to trade cautiously, so that potentially disastrous market movements don’t result in an account wipe-out, only the loss of small percentage of your total account capital.

It is also important to realise that all traders, whatever their level of expertise, are likely to lose money at some point on a trade. All trades have the possibility of ending badly – whether careful planning has gone into them or not. Savvy traders will understand that losses are inevitable when it comes to trading, as market movement is essentially unpredictable, and will not take personal losses as a sign of failure. The best traders have the ability to move forward and learn from their mistakes, and with discipline, patience and perseverance, they will hopefully win more trades than they lose over time.

COMMODITY AND EQUITY MARKETS


Commodity and Equity Markets

Commodity and Equity Markets

Fluctuating commodity prices can significantly influence the earnings of public companies, and as a result, can also affect the price movement of the markets. When commodities are trading at high levels, certain businesses and indices may be boosted, while the reverse may be true for declining commodity prices.  

For example, a significant number of businesses are based around the extraction or harvesting of commodities. Cotton, for instance, is used in a vast range of clothing. If its price were to increase, a retailer’s cost of goods would increase. This could lead to the retailer either raising its prices, or swallowing the rising cost – both of which could affect the company’s financial performance and therefore its stock price as well.

Many mining companies listed in financial indices are also significantly sensitive to commodity prices.

For example, if gold, silver and copper are trading at high levels, the share price of mining companies might increase, as they may be able to earn more by selling these commodities at higher prices. If the move was substantial enough, it could also drive an increase in the value of the indices that these mining companies are listed on. So, if mining stocks are on the rise, the FTSE 100, for example, which lists many mining companies, may see a rise in parallel with this event. 

For this reason, it can be beneficial to monitor commodity prices if indices and equities are part of your trading portfolio. It is also worth considering trading equities or indices related to the commodity you are trading. This can help you to identify and take advantage of unique opportunities and winning positions in the markets.

KEY COMMODITY EXCHANGES AND COMMODITY REGULATORS


Key Commodity Exchanges and Commodity Regulators

Key Commodity Exchanges and Commodity Regulators

So, where are the key centres of commodity trading? The largest commodity exchange in the US is not in New York, but Chicago – the CME – which is an acronym for the Chicago Mercantile Exchange & Chicago Board of Trade. It also owns the New York Mercantile Exchange. Other commodity exchanges of significant size can be found in Japan, China and India.

The following regulatory bodies are also central to commodities trading:

  • The Commodities Futures Trading Commission (CFTC) in the US.
  • The European Securities and Markets Authority (ESMA) in Continental Europe.
  • The Financial Conduct Authority (FCA) in the UK.

​COMMODITIES TRADING WITH ETX Capital

​COMMODITIES TRADING WITH ETX Capital

​COMMODITIES TRADING WITH ETX Capital

  • Select Your Trading Format - When it comes to Commodities Trading, ETX Capital offers its clients a choice on many products; between ‘rolling daily’ and ‘futures’ formats.
  • Large Range of Choice - From Cocoa, Copper and Crude Oil to Silver, Sugar and Soybeans, ETX Capital offers a comprehensive range of commodities trading opportunities.
  • Available on Three Different Platforms - ETX Capital offers commodity trading on every platform it operates; clients can trade Commodities via the ETX TraderPro, ETX MT4 or ETX Binary platforms.

AWARD WINNING

  • moneywise

    Money AM Awards 2012 Best Online Charts

  • investments

    Investment ​Trends Award 2013 Best Value for Money

  • ukforex

    UK ​Forex ​Award 2013 Best Forex Trading Tool & Software

Current SPREADS & PRICES

All market data displayed has been derived by Monecor and is not in its original raw form.


Why us

Financial Conduct Authority

Authorised and Regulated

ETX Capital is authorised and regulated by the Financial Conduct Authority: Financial Services Number 124721.

Choice

Choice

There are thousands of products available to trade, including indices, commodities, stocks and forex pairs.

Mobility

Mobility

Take our platforms with you wherever you go: all three are available on mobile and tablet devices on both iOS and Android.

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