Commodities

Stonefort offers real-time access to some of the most popular commodities out there

Why trade Commodities?

Explore opportunities across a wide range of commodities and precious metals, around the clock.

Go long or short, starting from 0.01 lot, for ultimate flexibility and risk management.

Stonefort’s deep liquidity pools means low latency, fast execution in one of the biggest markets in the world.

Multiple platforms, same efficient execution and pricing.

Frequently asked questions

How does commodities trading work?

Trading commodities, such as gold, oil, and agricultural goods is done in a similar way to trading other financial products. Nowadays, the majority of trading is electronic and for Commodities, it’s no different. Traders seek to profit from changes in price that are caused by supply and demand, economic trends, and geopolitical events. At Stonefort Securities Limited   , we offer a variety of commodities available for trading. While commodities share characteristics with other financial products, they are influenced by more specific factors and their daily behavior is different. Proper understanding of the commodities market and risk management concepts are crucial for those looking to trade commodities. Learn more about trading Commodities in our extensive Trading Guides. 

What are the main types of commodities?

Trading in commodities include metals (gold, silver, platinum), energy (natural gas, oil), and agricultural products (corn, wheat). The commodities mentioned before are just a few from  a broader list of global goods. Commodities can be classified into two categories: soft commodities (grown, like coffee) and hard commodities (extracted or mined, like gold). Discover more the different types of commodities here.

Where are commodities traded?

Commodities are primarily traded on exchanges. However, for those looking to speculate on price movements without taking physical delivery of the commodity, there are other options available, such as Contracts for Difference (CFDs). The Chicago Mercantile Exchange (CME), London Metal Exchange (LME), and New York Mercantile Exchange (NYMEX) are some of the major commodity exchanges. Online trading platforms have democratized access to commodity markets, allowing even beginners to participate.

How can I start trading commodities?

To start trading commodities, you need to have a trading account. You can open an account with us here at Stonefort Securities Limited   and get access to a range of commodities and other assets. Get Started.

 It’s important to familiarize yourself with the commodities you wish to trade, understand market trends, and develop a solid trading strategy to increase your chances of success. Learn more about trading Commodities in our extensive Trading Guides. 

What makes commodity prices go up and down?

Commodity prices fluctuate due to various factors including:

  • Supply and Demand: Changes in production levels and consumer demand directly impact prices.
  • Geopolitical Events: Political instability and conflicts can disrupt supply chains, affecting prices.
  • Macroeconomic Indicators: Economic growth, inflation, and currency volatility influence commodity prices.
  • Market Conditions: Trader sentiment and speculative activities can cause price swings.
  • Weather and Technology: Weather conditions and technological advancements in production can also impact prices.
Can I invest in commodities?

Yes, you can invest in commodities. Commodities are raw materials or primary products that are used in the production of goods and services. You can invest in commodities through various investment products, such as:

  • Stocks: Invest in companies that extract, process, or trade commodities, such as oil, gold, or agricultural products.
  • Exchange-Traded Funds (ETFs): Track a specific commodity index, such as the S&P GSCI Commodity Index, which tracks the performance of a basket of commodities.
  • Futures Contracts: Buy or sell a commodity at a set price on a specific date in the future.
  • Mutual Funds: Invest in a fund that pools money from multiple investors to invest in a diversified portfolio of commodities.
  • Physical Commodities: Buy and store physical commodities, such as gold or silver, as an investment.

 

Keep in mind that the above is not investment advice and simply serves to highlight the different ways that investors can participate in the commodity markets.

Is investing in commodities a good idea?

Investing in commodities can be a good idea, but it’s essential to understand the benefits and risks involved. Commodities are raw materials or goods that are used as inputs in the production of other products, such as oil, gold, and agricultural products.

Here are some points to consider:

Benefits:

  • Diversification
  • Potential for high returns
  • Inflation hedge

 

Risks:

  • Volatility
  • Market risks
  • Leverage

 

Ways to invest in commodities:

  • Physical commodities
  • Commodity ETFs
  • Futures contracts
  • Commodity stocks

 

Risk is always present when trading leveraged products such as commodities. The above is not investment advice and simply highlights the characteristics of trading commodities.

What is leverage in commodities trading?

Lеvеragе in commoditiеs trading allows tradеrs to control largеr positions with a smallеr amount of capital, often just a percentage of the total contract valuе. This mеans tradеrs can significantly amplify thеir еxposurе to thе mаrkеt by using borrowed funds, which can multiply thеir potеntial profits or lossеs. A tradеr only needs to put down a fraction of the total value of a position, typically ranging from 3-12% of thе contract's notional valuе, to open a tradе. This makеs lеvеragе a powerful tool but also a risky one.  Learn more about Leveraged Trading with Stonefort.

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