Commodities Trading
Access the world’s leading commodity markets. Fuel your trading strategy by trading Gold, Oil and various other hard and soft commodities with low spreads and fast execution.
Trade Commodities with VTIFX
Trading Commodity CFDs (Contracts for Difference) is one way to diversify your portfolio and hedge risks.
With VTIFX, investors can choose from an extensive portfolio of commodities while benefiting from advanced trading tools and the latest technology the market has to offer – including high execution speeds, low slippage, deep liquidity, and tight spreads.
Take advantage of price fluctuations on a wide range of instruments, including Gold (XAU), Silver (XAG) and Crude Oil (Brent, WTI), helping diversify your investment portfolio and potentially mitigating the risks of a sudden market downturn.
Why trade Commodities with us?
- Leverage up to 500:1
- Wide range of commodities including metals, energy, and agricultural products
- Exposure to international markets and growth
- Market open 24/5
- High liquidity allows swift entries and exits
- Inflation hedging
- Tangible asset backing
- Educational resources
- Multilingual Customer Support
Diversify your investment portfolio with Commodities
Commodities are regarded as the building blocks of the modern global economy. As such, they are essential for global economic growth, drawing the attention of investors and traders around the world who consider them excellent investment vehicles.
Commodities fall into two broad categories: hard commodities and soft commodities. Hard commodities are those mined from the earth or extracted from natural resources. This category includes metals such as gold, silver and iron, as well as energies such as oil, natural gas, and coal. Soft commodities refer to commodities that are grown; popular soft commodities include agricultural products like coffee, cocoa, cotton, sugar, etc.
Commodities are among the most traded financial instruments in the world due to their high volatility, which can create an array of trading opportunities, as well as their portfolio diversification potential. What separates commodities from other financial assets is that they are interchangeable and standardised, with their prices determined based on supply and demand through trading on the relevant commodity exchange.
How to choose which Commodity to trade?
When trading commodities, liquidity is one of the main factors you should consider before investing. This is because liquidity determines the ease with which you can sell or buy a commodity. Market depth and liquidity attract traders so the most traded commodities have a well-established market of buyers and sellers at any given time.
Some commodities are widely used in a range of financial instruments such as futures, options, Exchange-Traded Funds, etc., giving traders many opportunities to engage in markets. However, lack of asset range may discourage traders from adding specific commodities to their portfolio.
What are the best platforms to trade Commodities?
MetaTrader 4 & 5: The world’s most popular trading platforms
Discover the benefits of trading Commodity CFDs on the most powerful trading platforms available, MetaTrader 4 (MT4) and MetaTrader 5 (MT5). Available across desktop and mobile devices.
- Spreads from 0.0 pips & leverage up to 500:1
- Customisable interface, including colours of technical indicators
- One-click trading
- Live price streaming on Live and Demo accounts
- 128-bit SSL encryption for secure trading
- Expert Advisors (EAs)
- Customisable alerts
6 reasons to choose VTIFX
Reliable & Regulated
Licensed across multiple jurisdictions, ensuring transparency & security.
Cost-effective Trading
Spreads as low as 0.0 pips, fast execution, and transparency.
Market Expertise
Trade smarter with in-depth, real-time analysis from our Research Team.
Multilingual Support
A dedicated multilingual support team available in your preferred language.
Reliable & Regulated
Licensed across multiple jurisdictions, ensuring transparency & security.
Intuitive Platforms
Trade with confidence on industry-leading platforms available across all devices.
What is Commodity trading?
Buying and selling quantities of commodities in the market is called commodity trading. Popular commodities include West Texas Intermediate (WTI) Crude Oil, Brent Crude Oil, Gold (XAU) and other precious metals, and soft commodities such as Wheat, Coffee, Cocoa, Soya, etc.
Price movements in commodities are relatively slow and are usually seen as bellwethers and market indicators for the overall health of global markets. Various factors including geopolitical tensions, adverse weather conditions and seasonal availability, natural disasters, climate change and other non-market factors can impact commodity prices.
Typically, trading in commodities can be either speculative or for hedging purposes. Traders can trade commodity markets to express their outlook on specific industries or to hedge their trading portfolio by taking an opposite position in a commodity to offset potential losses. Hedging based on commodity trading serves as a risk management strategy that aims to minimise potential losses, but could also limit potential returns.
Through careful market analysis, CFD traders speculate on the direction of commodity prices and attempt to capture potential profits based on price fluctuations and volatility. The market is open 24 hours a day, 5 days a week, from 5:00 pm EST on Sunday to 4:00 pm EST on Friday.
Commodity trading example
Suppose you want to trade CFDs, where the underlying asset is the West Texas Intermediate crude oil (XTI/USD), an energy commodity. Let us suppose that the XTI/USD is trading at:
Bid Price: 83.00 / Ask Price: 83.01
Commodity trading example
You decide to open a long position on 2,000 barrels of XTI/USD via a CFD because you think that the XTI/USD price will rise in the future. Your margin rate is 1%. This means that you need to deposit 1% of the total position value into your margin account.
Now, in the next hour, if the price moves to 83.10/83.11, you have a winning trade. You could close your position by selling at the current price of USD 83.10.
Commodity trading example
Types of Commodities
Commodities are tangible raw materials or agricultural goods sourced from nature. They are used in the production of other goods and play a significant role in global economic growth.
There are two types of commodities:
- Hard commodities: Natural resources that are mined or extracted.
- Soft commodities: Agricultural products or livestock.
When it comes to trading, commodities are split into four main categories:
- Metals: Includes precious metals such as gold, silver, platinum, palladium and copper.
- Energy: Crude oil and natural gas are the main traded energy products. Heating oil, gasoline and electricity belong to this category.
- Agriculture: Agricultural commodities are centred around staple crops and animals. Wheat, rice, corn, soybeans and coffee are among the most common crops. The category includes livestock and meat such as live cattle, pork, and eggs.
- Livestock and Meat: This category includes cattle, hogs, poultry and their meat products.
What are the most traded Commodities?
Some commodities are traded more often than others. Market depth and liquidity, global demand and usage or even durability are some of the reasons that traders are drawn to trading Commodity CFDs.
Gold
Gold is one of the most traded commodities and the top one among precious metals. Despite abandoning the gold standard decades ago, central banks continue to hold large amounts of gold reserves. Gold is used in hedging strategies, especially when the US dollar falls against other major currencies.
Other Metals
Silver, platinum and palladium belong to the precious metals’ group of commodities. They are considered safe-haven investments that may help investors mitigate their risks during market downturns.
Crude Oil
The widespread use of oil makes it one of the most in-demand commodities. As oil is one of the main sources of energy, crude oil price fluctuations could have a significant impact on global markets.
How to trade Commodities?
There are several ways to trade commodities such as precious metals and oil. As commodities are physical products, investors have the option of purchasing physical quantities of gold, silver, crude oil to name a few. However, storing commodities requires transportation and space which incur the relevant costs.
This is one of the reasons why commodity futures trading emerged. Through exchange-traded funds (ETFs), you are able to enter into an agreement to buy or sell shares of an underlying ETF at an agreed price prior to a specified date. Many large corporations use futures markets to hedge against market volatility.
VTIFX offers Commodity CFD trading, in which you do not own the underlying asset and enter into a contract that, unlike futures contracts, does not have a specified end date. Trading gold, silver, crude oil or other commodities allows you to hedge against high-risk market conditions using your margin trading account. Similarly, these commodities are also traded against major currencies in Forex Trading.
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