Commodities

Commodities form an important part of all of our lives. Without commodities we wouldn’t have the bacon, cereal, and orange juice for our breakfast. We wouldn’t have coffee to get us going in the morning, or cocoa for our sweet chocolate treats. Because commodities are the basic goods used throughout our lives we would be lost without them. The traditional commodities include grains like wheat and corn, as well as more exotic commodities like cocoa and coffee.

For traders the commodities can be an excellent way to diversify trading away from forex or equities. The agricultural commodities all tend to have periods of great volatility that can present excellent opportunities. They also have very little correlation with equities and currencies, so can be a good alternative to equity and forex markets.

Before the advent of online brokers like Ubrokers, commodity trading was out of reach for the average investor. Those who wanted to trade these soft commodities had to invest not only significant amounts of money, but also large chunks of time in order to gain the necessary expertise required to follow these markets successfully. That meant commodity trading was primarily limited to the professional traders in each individual market.

Today, thanks to the internet and the easy spread of information, anyone can participate in trading commodities. All it takes is an internet connection, a small amount of money to get started, and an account with an online broker – like Ubrokers.

Popular Commodities Contracts

The most popular commodity contracts for traders are as follows:

  • Sugar
  • Cotton
  • Milk
  • Orange Juice
  • Cocoa
  • Coffee
  • Corn
  • Rice
  • Soybeans
  • Wheat

As you can see there are plenty of markets to be traded within the realm of commodities. Each has its own tendencies and characteristics, which means there’s always going to be an opportunity somewhere. Maybe there’s an early frost in Florida? That would usually result in higher Orange Juice prices, due to damage to the orange crops. Grains can be particularly volatile during the spring planting season and the summer growing season. This is especially true when weather patterns differ from the norm. In most cases weather will play a heavy part in the movements of commodities prices, so you should probably become very familiar with global weather patterns if you’re planning on trading commodities.

Another way to look at the agricultural commodities is to look at any situations where you get increased demand combined with a limited supply for any reason. It can be weather related, some disease in the crop or livestock, or even something that makes it more difficult to harvest or ship the commodity. All these situations can provide traders with opportunities in the agricultural commodities.

Advantages of Commodities Trading on Ubrokers

One of the markets we’ve found to be an excellent place to begin is the cocoa market. Traders just getting started with commodity trading seem to pick up the details of this market easily. Ubrokers can help with our deep educational materials that will advise you on the fundamental aspects that move cocoa prices. We also have detailed guides to technical trading, which can help in recognizing good entry and exit points in the market.

It doesn’t have to be cocoa though. Any of the commodities you have an interest in can be a good starting point. Maybe coffee is your passion, or perhaps you feel like you can understand the complexities of the sugar market best. Ubrokers can help you on your trading journey with our CFDs on commodities and our education section.

Because commodity markets can be very volatile directly investing via futures is an extremely risky proposition, especially for those who have little experience with the commodity in question. Those just starting in the commodities markets will be far better served using the CFD products Ubrokers offers rather than the traditional futures where you could lose your entire deposit and more if a trade goes against you.

Take the Ubrokers platform for a test drive with a demo account and see what trading cocoa here at Ubrokers is like. We’re willing to bet you’re going to like it and will soon be ready to open your own trading account with us to begin trading cocoa CFDs.

Company Information: This website (www.ubrokers.com/eu) is operated by Capital Securities S.A., a Greek Investment Firm, authorized and regulated by the Hellenic Capital Market Commission (“HCMC”) with licence number 2/11/24.5.1994. The Company is registered in Greece under GEMI with register number 31387/06/Β/94/18. Capital Securities S.A. is registered at 58, Metropoleos Street, 105 63, Athens, Greece.

 

Capital Securities S.A. owns and operates the “Ubrokers” brand.

 

Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Past performance does not constitute a reliable indicator of future results. Future forecasts do not constitute a reliable indicator of future performance. Before deciding to trade, you should carefully consider your investment objectives, level of experience and risk tolerance. You should not deposit more than you are prepared to lose. Please ensure you fully understand the risk associated with the product envisaged and seek independent advice, if necessary. Ubrokers does not issue advice, recommendations or opinions in relation to acquiring, holding or disposing of any financial product. Capital Securities S.A. is not a financial adviser and all services are provided on an execution only basis. Please read our Risk Disclosure document.

 

Regional Restrictions: Capital Securities S.A. offers services within the European Economic Area (excluding Belgium) and Switzerland.

 

Capital Securities S.A. does not issue advice, recommendations or opinions in relation to acquiring, holding or disposing of any financial product. Capital Securities S.A. is not a financial adviser and all services are provided on an execution only basis.

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