CFD Commodity Trading

Written By

Jemma Grist

Edited By

Tobias Robinson

Fact Checked By

William Berg

Updated

Jul 24, 2024

Contract For Difference (CFD) commodity trading allows for investors to bid on the changes in the value of particular commodities. CFDs do not require the trader to own the commodities themselves, only the difference from the initial price is exchanged between the broker and investor when the trade is complete. This article will discuss what commodities are, what CFD commodity trading is, what to look out for and the best online brokers.

Best CFD Commodity Trading Brokers

Click a broker for details

1

Interactive Brokers

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Interactive Brokers Review

Ratings

Regulation & Trust 4.5 / 5

Accounts & Banking 3.5 / 5

Assets & Markets 4.6 / 5

Fees & Costs 4.3 / 5

Platforms & Tools 3.3 / 5

Customer Support 3 / 5

Research 4.4 / 5

Education 4.3 / 5

iOS App 4.3 / 5

Android App 4.5 / 5

Minimum Deposit $0

Minimum Trade $100

Leverage 1:50

Regulator FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA, AFM

Instruments Stocks, Options, Futures, Forex, Funds, Bonds, ETFs, Mutual Funds, CFDs, Cryptocurrencies

Platforms Trader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, TradingView, eSignal, TradingCentral, ProRealTime, Quantower

Payment Methods Cheque, ACH Transfer, Wire Transfer, Automated Customer Account Transfer Service, TransferWise, Debit Card

Account Currencies USD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF

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2

UnitedPips

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UnitedPips Review

New Customer Bonus Offer 40% Deposit Bonus

Ratings

Regulation & Trust 2 / 5

Accounts & Banking 3.5 / 5

Assets & Markets 3 / 5

Fees & Costs 3.8 / 5

Platforms & Tools 3.5 / 5

Customer Support 3.5 / 5

Research 2.8 / 5

Education 2.5 / 5

iOS App 3 / 5

Android App 3 / 5

Minimum Deposit $10

Minimum Trade 0.01 Lots

Leverage 1:1000

Regulator IFSA

Instruments CFDs, Forex, Precious Metals, Crypto

Platforms UniTrader

Payment Methods PayPal, Credit Card, Debit Card, Perfect Money, Bitcoin Payments, Ethereum Payments

Account Currencies USD

Go To UnitedPips
3

RedMars

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RedMars Review

Ratings

Regulation & Trust 3.3 / 5

Accounts & Banking 3.5 / 5

Assets & Markets 3.8 / 5

Fees & Costs 3.5 / 5

Platforms & Tools 3.8 / 5

Customer Support 4 / 5

Research 2.8 / 5

Education 3 / 5

iOS App 4.7 / 5

Android App 4.6 / 5

Minimum Deposit €250

Minimum Trade 0.01 Lots

Leverage 1:30 (Retail), 1:500 (Pro)

Regulator CySEC, AFM

Instruments CFDs, Forex, Stocks, Indices, Commodities, Cryptos

Platforms MT5

Payment Methods Credit Card, Wire Transfer, Debit Card, Sticpay, FasaPay, Bitcoin Payments, Trustly, PayPal, Skrill, Neteller, Klarna, Mastercard, Visa

Account Currencies USD, EUR

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4

IQCent

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IQCent Review

New Customer Bonus Offer 20% to 200% Deposit Bonus

Ratings

Regulation & Trust 2.5 / 5

Accounts & Banking 3.3 / 5

Assets & Markets 2.4 / 5

Fees & Costs 4.3 / 5

Platforms & Tools 3.8 / 5

Customer Support 2.5 / 5

Research 3 / 5

Education 2 / 5

iOS App 4.3 / 5

Android App 4.1 / 5

Minimum Deposit $250

Minimum Trade $0.01

Leverage 1:500

Regulator IFMRRC

Instruments Binary Options, CFDs, Forex, Indices, Commodities, Crypto

Platforms Online Platform, TradingView

Payment Methods Credit Card, Debit Card, Wire Transfer, Bitcoin Payments, Ethereum Payments, Visa, Mastercard

Account Currencies USD, EUR

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5

Dukascopy

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Dukascopy Review

New Customer Bonus Offer 10% Equity Bonus

Ratings

Regulation & Trust 3.5 / 5

Accounts & Banking 3.5 / 5

Assets & Markets 3.8 / 5

Fees & Costs 3 / 5

Platforms & Tools 4.3 / 5

Customer Support 4 / 5

Research 4.5 / 5

Education 3.5 / 5

iOS App 4.6 / 5

Android App 3.7 / 5

Minimum Deposit $100

Minimum Trade 0.01 Lots

Leverage 1:200

Regulator FINMA, JFSA, FCMC

Instruments CFDs, Forex, Stocks, Indices, Commodities, Crypto, Bonds, Binary Options

Platforms JForex, MT4, MT5

Payment Methods Neteller, Wire Transfer, Mastercard, Skrill, Visa, Maestro, Credit Card, Debit Card, Apple Pay, Bitcoin Payments, Ethereum Payments

Account Currencies USD, EUR, GBP, CAD, AUD, NZD, JPY, ZAR, TRY, SEK, NOK, DKK, CHF, HKD, SGD, PLN, CZK, AED, SAR, HUF, MXN

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6

Capitalcore

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Capitalcore Review

New Customer Bonus Offer 40% Deposit Bonus up to $2,500

Ratings

Regulation & Trust 3.3 / 5

Accounts & Banking 3.8 / 5

Assets & Markets 3.8 / 5

Fees & Costs 3 / 5

Platforms & Tools 3.8 / 5

Customer Support 3.5 / 5

Research 2.5 / 5

Education 3.5 / 5

iOS App 3 / 5

Android App 3 / 5

Minimum Deposit $10

Minimum Trade 0.01 Lots

Leverage 1:2000

Regulator IFSA

Instruments Forex, Metals, Stocks, Cryptos, Futures Indices, Binary Options

Platforms WebTrader, Pro

Payment Methods Ethereum Payments, Mastercard, Visa, Perfect Money, Bitcoin Payments, Debit Card, Credit Card, PayPal

Account Currencies USD

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7

Sage FX

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Sage FX Review

New Customer Bonus Offer $1,500 trading competition

Ratings

Regulation & Trust 2.5 / 5

Accounts & Banking 3.5 / 5

Assets & Markets 3 / 5

Fees & Costs 3.3 / 5

Platforms & Tools 2.5 / 5

Customer Support 3 / 5

Research 1.3 / 5

Education 1.8 / 5

iOS App 5 / 5

Android App 4.1 / 5

Minimum Deposit $10

Minimum Trade 0.01 Lots

Leverage 1:500

Regulator Pending

Instruments Forex, indices, cryptos

Platforms TradeLocker

Payment Methods Credit Card, Visa, Mastercard, Bitcoin Payments, Ethereum Payments

Account Currencies USD, EUR, GBP, CAD, AUD

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8

Videforex

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Videforex Review

New Customer Bonus Offer 20% to 200% Deposit Bonus

Ratings

Regulation & Trust 2.5 / 5

Accounts & Banking 3 / 5

Assets & Markets 3.5 / 5

Fees & Costs 3.3 / 5

Platforms & Tools 3.5 / 5

Customer Support 4.5 / 5

Research 1.3 / 5

Education 1.3 / 5

iOS App 4.1 / 5

Android App 4.4 / 5

Minimum Deposit $250

Minimum Trade $0.01

Leverage 1:500

Regulator

Instruments Binary Options, CFDs, Forex, Indices, Commodities, Crypto

Platforms TradingView

Payment Methods Skrill, Perfect Money, Bitcoin Payments, Neteller, Credit Card, Visa, Mastercard, Ethereum Payments

Account Currencies USD, EUR, GBP, AUD, RUB

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9

xChief

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xChief Review

New Customer Bonus Offer $100 No Deposit Bonus

Ratings

Regulation & Trust 4 / 5

Accounts & Banking 3.8 / 5

Assets & Markets 3.7 / 5

Fees & Costs 3 / 5

Platforms & Tools 4.3 / 5

Customer Support 3.5 / 5

Research 3.5 / 5

Education 3.3 / 5

iOS App 4.8 / 5

Android App 4.7 / 5

Minimum Deposit $10

Minimum Trade 0.01 Lots

Leverage 1:1000

Regulator ASIC

Instruments CFDs, Forex, Metals, Commodities, Stocks, Indices

Platforms MT4, MT5

Payment Methods Wire Transfer, Bitcoin Payments, Credit Card, UnionPay, Skrill, Neteller, WebMoney, Perfect Money, Debit Card, Ethereum Payments, FasaPay, Volet

Account Currencies USD, EUR, GBP, JPY, CHF

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10

Plexytrade

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Plexytrade Review

New Customer Bonus Offer 120% Cash Welcome Bonus

Ratings

Regulation & Trust 1.5 / 5

Accounts & Banking 2.5 / 5

Assets & Markets 2.5 / 5

Fees & Costs 3.3 / 5

Platforms & Tools 2.5 / 5

Customer Support 3.5 / 5

Research 0.5 / 5

Education 0.5 / 5

iOS App 4.8 / 5

Android App 4.7 / 5

Minimum Deposit $50

Minimum Trade 0.01

Leverage 1:2000

Regulator

Instruments CFDs, Forex, Indices, Stocks, Commodities, Crypto

Platforms MT4, MT5

Payment Methods Bitcoin Payments, Ethereum Payments

Account Currencies USD, EUR

Go To Plexytrade

Here is a short overview of each broker's pros and cons

Interactive Brokers - Over 8,000 CFDs are offered on a vast array of instruments, encompassing stocks, indices, forex, and commodities. Moreover, the TWS platform lends itself to seasoned day traders, offering a comprehensive selection of over 100 order types and algorithms, alongside premium market data sourced from reputable sources such as Reuters and Dow Jones.
UnitedPips - UnitedPips supports CFD trading on a narrow selection of currencies, metals and cryptos. It somewhat compensates for the meagre asset range with high leverage up to 1:1000, seriously amplifying potential profits or losses, and spreads that don’t change with market conditions.
RedMars - RedMars caters to various short-term trading styles across popular asset classes, including 7 commodities, 14 indices, and 120+ stocks. Leverage is available up to 1:30 (retail) and 1:500 (pro), amplifying results. However, there is no calculator to help with understanding margin requirements and the depth of investments is limited.
IQCent - CFDs are available on forex, indices, commodities and cryptos, although the range of 100+ instruments is limited compared to alternatives such as Quotex with 400+. Leverage is available up to 1:500 but the $250 minimum deposit is noticeably higher than competitors.
Dukascopy - Dukascopy offers highly leveraged CFD trading up to 1:200. A wide selection of asset classes are available, including currencies, equities, commodities, ETFs and cryptos. Spreads are tight starting from 0.1 pips and traders get 24/7 support that performed well during testing. However, the real standout is the security provided by trading CFDs through a multi-regulated broker and Swiss bank
Capitalcore - The range of CFDs at Capitalcore is narrow, with 6 precious metals, 6 indices, and a slim suite of stocks. Notably, there are no commodities such as oil or gas and spreads vary greatly. Tiered leverage is available depending on the account, from 1:100 to 1:2000.
Sage FX - Trade CFDs on forex, stocks, metals, energies, indices, cryptos and dollar futures. Sage FX offers tight spreads and high leverage on all instruments from 1:100 to 1:500.
Videforex - Videforex CFDs are available on forex, indices, cryptocurrencies and commodities with up to 1:500 leverage and tight spreads from near zero. CFDs incur a commission fee of 1%–2.5% and up to 5% for leveraged trades.
xChief - You can trade a competitive range of CFDs encompassing crypto, indices, energies and metals, with very high leverage up to 1:1000. ECN pricing is available, with spreads from 0.0 pips and low commissions from $2.50. A Cent account is also available for those on a smaller budget.
Plexytrade - Plexytrade offers a modest selection of CFDs, providing opportunities to speculate on upward/downward price movements across 15 indices, 48 US stocks, 3 commodities, 4 metals, and 5 cryptos. The free margin calculator allows you to work out how much you need to put down to open and maintain leveraged positions.

CFD Commodity Trading Comparison

CFD Commodity Trading Comparison
CFD Leverage	Minimum Deposit	Minimum Trade	Regulators
1:50	$0	$100	FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA, AFM
1:1000	$10	0.01 Lots	IFSA
1:30 (Retail), 1:500 (Pro)	€250	0.01 Lots	CySEC, AFM
1:500	$250	$0.01	IFMRRC
1:200	$100	0.01 Lots	FINMA, JFSA, FCMC
1:2000	$10	0.01 Lots	IFSA
1:500	$10	0.01 Lots	Pending
1:500	$250	$0.01	-
1:1000	$10	0.01 Lots	ASIC
1:2000	$50	0.01	-

Interactive Brokers

"Interactive Brokers is one of the best brokers for advanced day traders, providing powerful charting platforms, real-time data, and customizable layouts, notably through the new IBKR Desktop application. Its superb pricing and advanced order options also make it highly attractive for day traders, while its diverse range of equities is still among the best in the industry."
Christian Harris, Reviewer

Interactive Brokers Quick Facts

FTSE Spread	0.005% (£1 Min)
GBPUSD Spread	0.08-0.20 bps x trade value
Stocks Spread	0.003
Leverage	1:50
Regulator	FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA, AFM
Platforms	Trader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, TradingView, eSignal, TradingCentral, ProRealTime, Quantower
Account Currencies	USD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF

Pros

IBKR continues to deliver unmatched access to global stocks with tens of thousands of equities available from 100+ market centres in 24 countries, most recently the Saudi Stock Exchange.
While primarily geared towards experienced traders, IBKR has made moves to broaden its appeal in recent years, reducing its minimum deposit from $10,000 to $0.
IBKR is one of the most respected and trusted brokerages and is regulated by top-tier authorities, so you can have confidence in the integrity and security of your trading account.

Cons

Support can be slow and frustrating based on tests, so you might find it challenging to reach customer service representatives promptly or encounter delays in resolving issues.
You can only have one active session per account, so you can’t have your desktop program and mobile app running simultaneously, making for a sometimes frustrating trading experience.
IBKR provides a wide range of research tools, but their distribution across trading platforms and the web-based 'Account Management' page lacks consistency, leading to a confusing user experience.

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Interactive Brokers Review

UnitedPips

"UnitedPips is ideal for traders seeking leveraged trading opportunities, the security of fixed spreads, and the flexibility to deposit, withdraw, and trade cryptocurrencies - all in one sleek TradingView-powered platform."
Christian Harris, Reviewer

UnitedPips Quick Facts

Bonus Offer	40% Deposit Bonus
FTSE Spread	NA
GBPUSD Spread	1.3
Stocks Spread	NA
Leverage	1:1000
Regulator	IFSA
Platforms	UniTrader
Account Currencies	USD

Pros

UnitedPips offers impressive leverage up to 1:1000 with zero swap fees or commissions, which can enhance potential returns for day traders and swing traders looking to control prominent positions with less capital.
Although being handed off mid-chat due to shift changes during testing was frustrating, customer support is generally good with quick, helpful responses, and 24/7 support via phone and email for regional teams is a definite advantage.
UnitedPips’ platform performs well, with an intuitive design that will appeal to beginners, while the TradingView integration delivers powerful charting tools without overwhelming users, making it straightforward to execute trades efficiently.

Cons

UnitedPips' selection of tradable instruments is still minimal, comprising a bare minimum selection of forex, metals and crypto. There are no equities, indices or ETFs, which may be a drawback for experienced traders looking for diverse opportunities.
Unlike brokers such as IG, UnitedPips is an offshore broker not regulated by any 'green tier' financial authorities, raising concerns for traders seeking assurance and protection under well-established regulatory frameworks.
UnitedPips lacks comprehensive research, while the educational content for beginner traders is woeful. Compared to brokers like eToro, which offers tutorials, webinars, and advanced courses, UnitedPips offers minimal resources to help new traders understand key concepts.

Visit UnitedPips

UnitedPips Review

RedMars

"RedMars is the best fit for experienced day traders familiar with the MetaTrader 5 platform and based in the EU, where the broker is authorized by the CySEC. However, the threadbare education and research tools make it unsuitable for beginners."
Christian Harris, Reviewer

RedMars Quick Facts

FTSE Spread	15
GBPUSD Spread	0.7
Stocks Spread	Variable
Leverage	1:30 (Retail), 1:500 (Pro)
Regulator	CySEC, AFM
Platforms	MT5
Account Currencies	USD, EUR

Pros

Getting started on RedMars is incredibly easy - you can be up and running in just a few minutes based on tests
The broker supports a range of flexible payment methods, including wire transfers, credit cards, e-wallets, and notably cryptocurrencies
RedMars offers one of the best platforms for day trading, MT5, hosting 21 timeframes, dozens of analytical tools, flexible templates and algo trading

Cons

RedMars falls short for newer traders, with little in the way of education, no beginner-friendly platform, a steep minimum deposit, and inadequate support during testing
While RedMars' spreads are within industry averages, they don't offer a significant edge over the cheapest day trading brokers we've personally used, notably IC Markets
With just 300 instruments, RedMars offers a narrow trading environment, particularly compared to category leaders like BlackBull Markets which offers 26,000 assets

Visit RedMars

RedMars Review

IQCent

"IQCent will appeal to day traders looking for a straightforward binary options and CFD trading platform with low fees, a range of accounts, and copy trading. Getting started takes less than 1 minute and a $250 deposit. "
Jemma Grist, Reviewer

IQCent Quick Facts

Bonus Offer	20% to 200% Deposit Bonus
FTSE Spread	1.4
GBPUSD Spread	0.8
Stocks Spread	N/A
Leverage	1:500
Regulator	IFMRRC
Platforms	Online Platform, TradingView
Account Currencies	USD, EUR

Pros

CFD trading fees are competitive based on tests, including 0.7 pips on major forex pairs such as EUR/USD
Keen traders can take part in trading contests with cash prizes
The proprietary terminal offers TradingView-powered charts which deliver dozens of technical indicators and studies

Cons

The market analysis is very basic with limited technical summaries and insights from analysts
IQCent charges a punitive $10 monthly inactivity fee if you fail to place at least 1 trade per month
There's no automated trading support for algo traders

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IQCent Review

Dukascopy

"If you’re an experienced trader, Dukascopy provides the tools you need: JForex for algorithmic strategies, competitive spreads from 0.1 pips, leverage up to 1:200, and the peace of mind of using a Swiss-regulated bank and broker."
Christian Harris, Reviewer

Dukascopy Quick Facts

Bonus Offer	10% Equity Bonus
FTSE Spread	100
GBPUSD Spread	0.1
Stocks Spread	0.1
Leverage	1:200
Regulator	FINMA, JFSA, FCMC
Platforms	JForex, MT4, MT5
Account Currencies	USD, EUR, GBP, CAD, AUD, NZD, JPY, ZAR, TRY, SEK, NOK, DKK, CHF, HKD, SGD, PLN, CZK, AED, SAR, HUF, MXN

Pros

Dukascopy is regulated by the Swiss Financial Market Supervisory Authority (FINMA) as both a broker and a bank, ensuring top-tier financial security and adherence to strict standards.
Dukascopy offers tight spreads starting from 0.1 pips, leverage up to 1:200 (depending on the jurisdiction), and volume-based commissions that reward high-frequency traders.
Dukascopy features some of the best research we’ve seen, even a professional TV studio in Geneva covering financial news, market analysis, and daily insights from professionals.

Cons

Some account types, such as the MT4/MT5 accounts, require a higher minimum deposit of $1,000, which may not be ideal for traders with smaller budgets.
While JForex is feature-rich, it has a steep learning curve, making it less suitable for beginner traders who might prefer simpler platforms.
Dukascopy's withdrawal fees are higher than most competitors we’ve tested, particularly for bank wire transfers, which may deter traders who require frequent access to their funds.

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Dukascopy Review

Capitalcore

"The major selling points of Capitalcore are its high leverage options up to 1:2000 and zero commission or swap fees. However, its weak regulatory oversight from the IFSA and non-existent education place it far behind the top brokers."
Christian Harris, Reviewer

Capitalcore Quick Facts

Bonus Offer	40% Deposit Bonus up to $2,500
FTSE Spread	25
GBPUSD Spread	0.5
Stocks Spread	1.5 (Apple)
Leverage	1:2000
Regulator	IFSA
Platforms	WebTrader, Pro
Account Currencies	USD

Pros

Capitalcore has added binary options trading on 30+ currency pairs, metals and crypto with one-click trading and payouts up to 95%.
The support team are available 24/7 and responded within minutes during testing with helpful responses.
Capitalcore is one of the only brokers to charge zero swap fees, which may appeal to Islamic traders looking to comply with Islamic Finance.

Cons

Capitalcore is not regulated by major financial authorities and has an unproven reputation, raising concerns about the safety of client funds.
Capitalcore’s threadbare education and research seriously trail category leaders like IG, making it less suitable for aspiring traders.
Platform support is limited to proprietary software, so there's no integration with the market-leading MetaTrader or cTrader, which offer built-in economic news and support automated trading.

Visit Capitalcore

Capitalcore Review

Sage FX

"Sage FX will suit forex traders looking for high leverage and ECN spreads. The broker's prop trading service will also appeal to users looking for funded accounts with up to $200K available."
Tobias Robinson, Reviewer

Sage FX Quick Facts

Bonus Offer	$1,500 trading competition
FTSE Spread	5.0
GBPUSD Spread	0.9
Stocks Spread	N/A
Leverage	1:500
Regulator	Pending
Platforms	TradeLocker
Account Currencies	USD, EUR, GBP, CAD, AUD

Pros

Fast withdrawal processing
Ability to deposit and withdraw via Bitcoin
Prop trading accounts with multiple funding tiers

Cons

Not regulated by any reputable body
Lacks educational resources and other extra features
Relatively narrow range of asset classes

Visit Sage FX

Sage FX Review

Videforex

"Videforex will serve traders looking for a no-frills, easy-to-use platform to speculate on the direction of popular financial markets through binaries. With a sign-up process that takes a matter of minutes and a web-accessible platform, getting started is a breeze. "
William Berg, Reviewer

Videforex Quick Facts

Bonus Offer	20% to 200% Deposit Bonus
FTSE Spread	Floating from 0.2
GBPUSD Spread	Floating from 0.1
Stocks Spread	NA
Leverage	1:500
Platforms	TradingView
Account Currencies	USD, EUR, GBP, AUD, RUB

Pros

Traders can earn up to 98% payouts on 100+ assets with the broker’s binary options, bringing it in line with competitors like IQCent.
Videforex is one of the few brokers with 24/7 multilingual video support, providing comprehensive assistance for active traders.
Videforex regularly runs trading contests, offering practice opportunities and cash prizes to beginners and experienced traders, with position sizes from just ¢0.01.

Cons

Videforex lacks authorization from a trusted regulator, meaning traders may receive little to zero safeguards like segregated client accounts.
The absence of any educational tools is a serious drawback for newer traders who can find blogs, videos and live trading sessions at category leaders.
The client terminal needs improvements based on our latest tests, sporting sometimes slow and unresponsive widgets which could dampen the experience for day traders.

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Videforex Review

xChief

"xChief continues to prove popular with investors looking to trade highly leveraged CFDs on the popular MetaTrader platforms. The broker's rebate scheme and investment accounts will particularly appeal to seasoned traders. However, the lack of top-tier regulatory oversight is a major drawback."
William Berg, Reviewer

xChief Quick Facts

Bonus Offer	$100 No Deposit Bonus
FTSE Spread	70
GBPUSD Spread	0.9
Stocks Spread	50
Leverage	1:1000
Regulator	ASIC
Platforms	MT4, MT5
Account Currencies	USD, EUR, GBP, JPY, CHF

Pros

The broker offers a turnover rebate scheme geared towards active investors, as well as trading credits and several other occasional bonuses
xChief delivers a high-quality day trading environment via the MT4 and MT5 platforms, with market-leading charts, indicators and tools
Traders can access a copy trading solution via the MetaQuotes Signals service

Cons

The Classic+ and Cent accounts provide access to fewer instruments than the other account types, at 50+ and 35+, respectively
xChief is an offshore broker with weak regulatory oversight from the VFSC, so traders will receive limited safeguards
The broker trails competitors when it comes to research tools and educational resources

Visit xChief

xChief Review

Plexytrade

"Plexytrade is a newcomer in the brokerage scene with attention-grabbing features like 1:2000 leverage, zero spreads on select instruments and fast execution speeds of less than 46 milliseconds. However, the absence of regulation is a significant concern, while the non-existent research and educational tools place it far behind industry frontrunners."
Christian Harris, Reviewer

Plexytrade Quick Facts

Bonus Offer	120% Cash Welcome Bonus
FTSE Spread	0.8
GBPUSD Spread	0.8
Stocks Spread	5
Leverage	1:2000
Platforms	MT4, MT5
Account Currencies	USD, EUR

Pros

There are various VPS packages starting from $50 per month, but they become complimentary once specific deposit thresholds are reached.
Plexytrade offers among the highest leverage we’ve seen, up to 1:2000, catering to advanced traders willing to forego regulatory protections.
Despite lacking regulation, Plexytrade provides negative balance protection and reinforces safety protocols by holding client funds in segregated accounts.

Cons

There are no research and educational materials, falling short of alternatives like IG, while access to the economic calendar is restricted to clients with balances of $500.
Deposits and withdrawals are exclusively facilitated through cryptocurrencies, as Plexytrade does not support bank cards, bank wire transfers, or e-wallets.
There are no social or copy trading features for inexperienced traders to replicate the trades of more experienced investors, trailing category leaders like eToro.

Visit Plexytrade

Plexytrade Review

What Are Commodities?

A commodity is a physical good that is usually a natural resource. Commodities of the same type are considered (almost) equal, no matter who produced them.

Goods and commodities that are fungible are not differentiated by brands or quality and their prices are determined by the performance of the market as a whole, closely following supply and demand.

Examples of goods that are used for CFD commodity trading are precious metals, oil and agricultural goods like rice.

Hard Commodities

Hard commodities are defined as those that are mined or extracted from the earth, i.e. natural resources that are not renewable. These are generally the most popular for CFD commodity trading and can be categorised into the following:

Metals

Metal commodities include gold, silver, copper and platinum. These metals are used in a variety of applications, such as jewellery (gold, silver), electronic wiring (copper) and other industrial uses (platinum, copper, silver etc.). Precious metals are, at times, invested in due to their reputation of being reliable stores of value, which can provide stability to some during periods of extreme market volatility.

Energy

Energy commodities consist of resources such as oil, natural gas, gasoline, etc. These commodities can also have other applications such as the production of plastics (oil), transportation (gasoline) and generating electricity (gas). Geopolitical factors can influence the price of oil, particularly the policies of OPEC (Organisation of Petroleum Exporting Countries).

Soft Commodities

Soft commodities are defined as those that can be grown and cultivated, i.e. renewable resources. As such, the prices of these commodities are often more volatile, depending on external factors like climate and other environmental conditions. This has led to less popularity for CFD commodity trading than hard commodities, though investors with a large risk appetite may prefer these.

Agriculture

Agricultural commodities are natural resources like wheat, rice, coffee and corn. These are used as sources of food for both people and livestock, as well as the production of other products. It is common for the price of these goods to be heavily impacted by periods of turbulent weather, population growth and natural disasters.

Why Are Commodities Suitable For CFD Trading?

The price of commodities is affected by the concept of supply and demand. If there is more demand for the good than supply, then the price of the commodity increases, and vice versa. The growth of large economies like India and China has led to increases in the demand for various goods, such as metals and energy.

Pros & Cons

Key takeaways that you should keep in mind about why CFD commodity trading could be beneficial to you are:

You only need to deposit a small percentage of the full commodity value (usually around 5-10%) to open your position on the market through the use of margin trading.
Traders can take a position on an increase in value of a commodity without having to physically purchase and take ownership of it.
You can “short” a commodity if it is going down in value, allowing you to trade during bearish markets.

However, there are negatives that you should be aware of and understand before CFD commodity trading:

You will never own the underlying commodity when trading with CFDs.
Although the profits could be great, the losses can be just as big. For every point that the market moves against you, you will make a loss. Margin trading can cause you to lose more than your initial investment.
CFD commodity trading, and indeed any CFD trading, is banned in certain financial jurisdictions, such as the US.

Strategies

CFD commodity trading is a different playing field from investing in company stocks. Given that CFDs are used for the most part as short-term investments, you will likely want to employ short-term intraday trading strategies when trading gold, coffee or other commodities.

You should also check the hours that the particular markets are open for trade. For coffee, the CFD commodity trading hours may be different from those of UK oil. As a general rule of thumb, CFD commodity trading can be conducted provided that the physical commodity market is open for trading.

News

You must look at the current price trends and latest news releases before beginning CFD commodity trading. Given that commodities are greatly influenced by supply and demand, you should take a bit of time to make yourself familiar with the particular instrument that you are interested in.

Is there a shortage of the particular commodity? Is there a surplus due to an exceptional harvest? Are there any laws or regulations being implemented that may impact the commodity? These are the sorts of questions you should be asking.

Hedging

As CFD commodity trading allows you to “short” a market, so you can trade any drop in value, you can utilise this as a means of counterbalancing your investment portfolio.

If you predict a sell-off of a commodity that you have already invested in, you can obtain short CFDs at a fraction of the price (using the margin decided by your broker) for the same amount of the commodity you possess.

This means any losses would be offset by the returns you make on the short CFD trade.

Check that your broker permits hedging first.

Scalping

This is one of the more popular strategies for CFD commodity trading. The aim of scalping is to exit positions quickly, with the aim of making small gains, reducing the risk of losing money from market reversals.

Again, check your broker permits scalping prior to trading.

As individual gains are often low, high margin levels are often used and a large number of trades are made throughout the day.

How To Start CFD Commodity Trading

Choose A Broker

To begin CFD commodity trading, you will need to choose a broker. Some of the key factors to consider are:

Margin: If you plan to make use of leverage in your CFD commodity strategy, you should check whether a broker offers high leverage rates and low margin rates.
Spreads: CFD brokers usually make their money through bid-ask spreads. The advertised buy price for a commodity will be higher than the actual market value and the sell price will be lower. The smaller than spread, the less the market needs to move for the trade to break even – or better.
Costs & Fees: If holding a position overnight, brokers usually charge interest, which can increase with the number of days you maintain the position. These often vary between brokers, so if you intend to keep overnight holdings you should carefully consider these extra fees.
Reputation: Is the broker well known? Have there been any reported issues with their platform before?

Popular CFD brokers such as Trading 212 and eToro allow you to trade most commodities — especially popular ones like gold — using CFDs.

Opening Your Position

Before opening any position on a commodity of your choice, you should only invest an amount that you are comfortable with losing.

On most broker platforms, opening up a CFD commodity trading position is simple and easy. You will be presented with an option to buy (go long) or sell (short) your chosen commodity. Going long on a commodity will mean that you will gain when the price of the commodity increases while shorting a commodity is the opposite.

The CFD trading view on the broker platform should offer you most of the information you require to place your position, such as any graphs and informatics on the chosen commodity market.

Monitoring Your Position

Given that the losses incurred when CFD commodity trading can be considerable and profit windows can be slim, you should keep tabs on any open positions.

If you believe that the commodity market in which you invested is beginning to move in the wrong direction, you should consider exiting to reduce or avoid losses. Some platforms allow you to place stop-limit boundaries, which help you define your acceptable loss limit before automatically exiting.

Tips For Trading

Here are a few helpful tips that you can take on board whilst CFD commodity trading:

Don’t take on more than you can afford. Given that the per-point value difference is magnified by the size of your trade, you should set yourself a limit on what you consider an acceptable loss.
Automate exiting your positions to help avoid losing more than you want and retaining trading capital.
CFD commodity trading with margin could result in greater profits than otherwise, though losses will also be magnified in the same way.
Be wary of any exchange rate fees. Some platforms may open your CFD trading positions in a different currency from your account’s base currency. Brokers will usually credit or charge your account after the exchange has been executed at the time of the transaction.
CFD commodity trading can be used to hedge other investments, such as company stocks dependent on natural resources or currencies for economies that are heavily based on commodity exports.

Final Word

CFD commodity trading greatly improves the accessibility of the commodities markets, allowing retail traders to viably trade price fluctuations of natural resources without the logistic issues presented by physically purchasing the goods. CFDs also allow for margin trading, automated trading and the shorting of commodities from gold to crude oil to coffee beans. To get started with CFD commodity trading today, see our list of the top brokers here.

FAQs

What Is CFD Commodity Trading?

This is a form of derivatives trading that allows traders to speculate on commodity prices without owning the assets in question. When trading a commodity with a CFD, it allows the investor to speculate on the future price of that commodity without having to actually own it. One of the advantages of this method is that you can profit from the decrease in value as well as the increase.

What Are Commodities?

Commodities are physical goods that are often heavily involved in international trade. These can be energy sources like natural gas, precious metals like gold and silver or agricultural products like wheat or tea.

Supply and Demand?

Supply and demand is an economic model of price determination that is important to understand when CFD commodity trading. In a nutshell, when there is more supply than demand, the value of the commodity will decrease, and vice versa.

What Is Going Long And Short?

Going long when CFD commodity trading is much like purchasing some of a commodity. It is a prediction that the value of an asset will rise. Shorting an asset, or going short, is the opposite and the trade would finish in profit with a fall in the value of the asset – but lose if the asset value rose.

Can I Start CFD Commodity Trading In My Country?

Some countries like the US have banned CFD trading full stop. Whilst other countries may allow it, some only allow certain approved brokers to do these kinds of trades.