a Private Trading Platform

TARGETED TRADING

FUEL | GOLD | CEMENT | WATER | RARE EARTH ELEMENTS

US Commodities operates in markets that trades in the primary economic sector rather than manufactured products and covers the buying and selling of a large range of commodities including oil and gas, metals such as gold and silver, rare earth metals and water.

What is US Commodities Trading?

US Commodities trading covers the buying and selling of a large range of instruments including oil and gas, metals such as gold and cement.

Commodity trading is as old as the financial markets, and perhaps even older than that. The first example of an organised exchange for trading commodities dates back to Amsterdam in 1530. These days there are a whole host of markets available to trade with just a few clicks of a mouse or taps on your mobile device, but some commodities remain as popular as ever. Find out more about commodity trading here.

How to trade via US Commodities

  1. Choose your market – Choose the commodity, such as Crude Oil Brent, Gold or Natural Gas, that you want to trade CFDs on.

  2. Decide to buy or sell – Buy (go long) if you think prices will rise, or sell (go short) if you think prices will go down.

  3. Enter a trade size – Decide on the amount per point movement (spread betting) or how many units (CFDs) you want to trade. When trading CFDs the value of one unit can vary depending on the instrument you’ve chosen to trade.

  4. Manage your risk – Select from a range of stop-loss orders including guaranteed stop-loss orders (GSLOs). GSLOs work exactly the same as regular stop-loss orders, except that for a premium, they guarantee to close you out of a trade at the price you specify regardless of market volatility or gapping. The premium is refunded in full if the GSLO is not triggered.

  5. Monitor your position – After placing your trade, monitor your open positions (including any stop orders or take profit orders) to follow your real-time profit or loss. Please remember that losses can exceed your deposits.

  6. Close your position – If your trade is not automatically closed out as a result of a stop or take profit order being triggered, close your trade when you are ready

Types of commodity trading

There are a range of commodities you can trade, including commodities in the energy markets, in the form of oil and gas trading, and metal markets (like gold), and also cement, as these tend to be more popular with traders these days. 

 

We offer discounted prices on over 100 spot and forward commodity instruments on our Next Generation trading platform, including Refined Fuels (Gasoline, Diesel, Jet Fuel and Fuel Oil), Gold and Cement.

The commodity markets are traded in a similar way to other types of financial markets, but there are some points to be aware of in order to avoid any shocks or surprises when dipping your toe into commodities trading. At US Commodities, we focus on two of the more actively traded commodities: oil and gold. 

 

Trading Refined Fuels & Biofuels

 

Although there are many different types and qualities of crude oil, the two popular types to trade are Brent Crude and US West Texas Intermediate (WTI). As these are slightly different blends of oil, the prices vary depending on which one you are trading.

Factors influencing fuel prices

 

When trading commodities, it’s important to be aware of events that can have an impact on oil prices. Prices don't just depend on how much oil is being pumped out of the ground, for example. As it’s a global fuel source, when the world economy is expanding and factories are working flat out, it stands to reason that world consumption of a commodity such as oil will go up. 

 

As economies slow and demand drops, the price of oil and other commodities also tends to follow suit. In early 2016, crude oil was trading below $30 a barrel. 

 

Since oil prices are also impacted by world events such as politics and socioeconomic situations, including the Middle East crisis, it helps as an oil trader to keep on top of news so as not to get caught out by an unexpected shift in oil prices.

Other factors influencing oil prices include decisions by the Organisation of Petroleum Exporting Countries (OPEC) and other major oil producing nations, such as Iran, on how much oil is produced and supplied to the market. 

 

An ability to try and forecast how well or badly the world economy may fare in the months ahead is a definite plus point when it comes to trading a commodity like oil. But there is plenty of news that can cause fluctuations in the price on a day-to-day basis – and on an even shorter-term scale than that. If for example the US releases figures that show its economy is improving more quickly than expected, this could cause a surge in the price of oil as traders start to bet that demand will increase, consequently putting up the cost of a barrel. 

 

Or it could be that an oil-producing country resists international pressure to stabilise oil prices by increasing production. This could see further slides in the oil price as investors worry that more of the commodity will be produced than is needed. It really is a market that can be buffeted by plenty of world events, so it pays to stay on top of major economic news releases.

 

The gold standard

 

Another enduringly popular commodity is gold, which has long been considered a store of wealth and has held a special allure for many of us – as the Californian gold rush back in the 1840s would undoubtedly attest. Nowadays it’s traded like any other financial instrument and is still an important commodity to many traders around the world.

 

Traditionally, in times of trouble and market volatility, gold is perceived as a 'safe haven' – somewhere for investors to store their money away from other riskier assets. Although the yellow metal can in theory be traded in many currencies, the typical market quote is to price gold in dollars, usually as 'dollars per troy ounce'. This relationship to the US dollar is an important one and is another factor that will have an influence on the price of gold. If the dollar becomes more attractive to investors and starts to rise, the price of gold will usually drop. In recent years, some people have seen the US dollar as a safe haven for their money and that has reduced the appeal of gold.  

 

This is another aspect to weigh up when trading gold: the impact any moves in the dollar will have on the price of gold. For example, if the US central bank, the Federal Reserve, decided to cut interest rates, this would normally weaken the US dollar and lift the price of gold. As with oil, because gold is such a global commodity it pays to keep a watchful eye on the major economic announcements such as interest rates and unemployment figures, which are released on a regular basis.

Read our in-depth guide about how to invest in gold here.
 

The energy markets are also popular among commodity traders. The advent of renewable energy has generated added interest for commodities such as national gas, heating oil and gasoline. As with the oil markets, world events and politics can have an impact on the energy markets, so it’s wise to keep an eye on news and economic releases. 

 

One way to get a feel for commodity markets is to watch their moves over a period of time so you can experience the sort of things that happen and understand what makes prices change. And when you do start trading, it’s always sensible to start with small amounts and use risk management orders.

Disclaimer

 

US Commodities is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing on this site is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by US Commodities that any particular investment, security, transaction or investment strategy is suitable for any specific person.

 

US Commodities does not endorse or offer opinion on the trading strategies. The firm's trading strategies do not guarantee any return and US Commodities shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.

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1-800-45-TRADE

1-657-201-9010

 

14 Wall Street,

New York, NY 10005

Trading physical commodities is a complex process and come with a high risk of losing money rapidly due to leverage. 78% of retail investor accounts lose money when spread and/or trade in physical commodities. You should consider whether you understand how to trade and whether you can afford to take the high risk of losing your money.

 

US Commodities is not authorized and regulated by the Financial Industry Regulatory Authority (FINRA) in the USA or the Financial Conduct Authority (FCA) in the United Kingdom.

 

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