New to Commodities?
Commodities can represent some of the world's more volatile markets. Political situations, fluctuating levels of supply and even changes in the weather can have dramatic effects on commodity prices.
A major trait of the commodity markets is their susceptibility to fluctuating supply and demand. The ability to buy or sell forward contracts on regulated exchanges gives producers, consumers and traders in raw materials the power to limit their risk by hedging against adverse price movements.
Investors are attracted to commodity futures markets by the potential for dramatic price movements and a trading mechanism that makes short selling as easy as buying.
Large choice of commodities
We offer a diverse range of commodities markets, including both Spot and Futures contracts on some of our most popular markets. Trade in the headline-making energy markets, like Brent and US Light Crude Oil, or the key metals such as Gold and Silver and more. IG clients also trade on a broad range of softs including Chicago Wheat and US Cotton. To see a full range of our commodities markets take a look at Commodities Contract Details.
Commodities trading with IG
Trading commodity CFDs with IG offers a number of advantages over trading the equivalent futures markets.
- The ability to trade in smaller sizes than is possible in the underlying futures contracts
- The flexibility to go long or short on a range of markets
- SGD-denominated CFDs lets you trade a range of international commodities in Singapore dollars, eliminating your currency risk
- The use of a range of Risk Management features, such as Guaranteed Stops and Trailing Stops
It's important to be aware that although commodity prices can remain relatively static for long periods, they can also make dramatic moves. Coffee and cocoa, for example, are capable of doubling or halving in price over a relatively short period. These risks are compounded by the fact that many of these markets operate a system of price limits which mean that you could be locked into mounting losses for several days in a row with no opportunity to cut your position. You cannot sell a contract which is 'limit down' or buy one which is 'limit up', either in the underlying market or with IG. If you are concerned by this possibility, we would strongly suggest that you use Guaranteed Stops where you are guaranteed that, if the price gets to your stop level, your trade will be closed at your specified level regardless of market conditions.
Broaden your commodities knowledge
To learn more about what's happening in commodities markets, see our weekly Commodities Update, released every Friday. Along with accompanying performance charts displaying recent price movements, our analysts explain the factors influencing current trends in key commodities markets, such as Gold, Oil and Copper. You can also learn more about trading and some of the techniques involved with our free Seminars.
CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial investment, so please ensure that you fully understand the risks involved.