COMMODITIES TRADING

Commodities refer to tangible goods that are actively traded on different commodity markets. These goods can be classified into two main categories: hard commodities and soft commodities.
Hard commodities encompass natural resources, such as oil, gold, and rubber, which are typically obtained through mining or extraction processes. On the other hand, soft commodities are agricultural products like coffee, wheat, cotton and sugar that are grown rather than mined.
When you trade commodities, you're buying or selling these raw materials in a marketplace, whether to hedge against price fluctuations or speculate on future price movements. Commodity trading offers a way for traders to diversify investment portfolios. Both hard and soft commodities can be traded via CFDs with Vantage.

You can start by setting up a trading account with Vantage. Then, fund your account using our range of convenient funding methods, all available without any deposit fees. Next, select your preferred commodity product and open a position. When you feel the time is right, close the position to complete your trade.
If you’re completely new to trading commodities, you can tap on our library of free educational materials to better understand the product and trading strategies.

Investing in both currency and commodities markets offers distinct advantages for traders. The commodities market provides opportunities for portfolio diversification as it exhibits some predictable seasonal patterns. On the other hand, the forex markets offer high liquidity as the underlying asset being traded is currency. Additionally, investments in forex can be hedged to mitigate risks and safeguard against potential losses.
Forex and commodities trading have similarities and differences. Both allow speculation on short-term market movements, using currency futures in forex and commodities in the commodity market. Arbitrage opportunities exist in both, capitalising on varying exchange rates or commodity prices across different markets.
Regulation sets them apart. Commodities trading is heavily regulated, ensuring stricter oversight. Forex trading, on the other hand, tends to be more loosely regulated, providing greater flexibility.
Trading methods differ too. Forex is traded over the counter through brokers or banks, making it accessible for traders to trade South African Rand (ZAR) while commodities are traded on an exchange. Commodities have daily limits, halting further trading if exceeded.
Both offer diversification and exposure to global markets, making them valuable investments. By understanding these nuances, investors can effectively leverage these opportunities.

Three of the most commonly traded commodities include crude oil, gold, silver and base metals.

When using Vantage, you have the option to begin trading with a minimum deposit of USD$50. However, the specific amount required to trade commodities will vary based on factors, such as the type of commodities, leverage used, and your personal risk tolerance.