Top CTA Commodities Hub

Online commodity trading with a regulated CFD broker

Commodity trading explained

All over the world, people have been trading commodities for many centuries. Before the age of currencies, commodities were used as means of exchange and they were at the heart of the global economy well before bills and coins made it into the mainstream. The modern commodity market is wide and diversified. It includes precious metals such as gold or silver, energy commodities such as crude oil or natural gas and agricultural commodities such as coffee or cocoa.

Trading CFDs on commodities

When you trade commodities in the form of CFDs (contracts for difference), you invest in the commodity’s price instead of buying and owning it. Vestle allows you to trade CFDs on many commodities and you can search for a specific commodity on our trading platform, as well as to see the ones that feature the highest volatility.

Commodity trading explained

Applying leverage

Applying leverage

When you trade commodity CFDs with Vestle, you can apply leverage. This trading tools increases your trading power while simultaneously increasing risks. Since Vestle is an authorized and regulated company, maximum leverage is dictated by local regulations and varies according to the CFD instrument you choose to trade. For commodities, maximum leverage is 10:1. This means that for every £1 you invest, you can open trades worth up to £10.

For example, if you invest £500 in oil CFDs, you can open a deal worth up to £5,000.
Why? Because £500 (investment) x 10 (leverage) = £5,000.

Now that this is sorted out, let’s talk about short and long trading.

Sell or Buy?

What happened when you believe the price of a commodity – let’s stay with the crude oil example – is going to increase? That’s right. You buy it now, hoping to sell it later, when the price (hopefully) increases. On our platform, this is called a ‘Buy’ deal, but you might here some people refer to it as a ‘long deal’ or ‘going long’.
What happened when you believe the price of crude oil will decrease? We’ll, in this case, CFD traders can still invest, by opening a ‘Sell’ deal. This is also sometimes called a ‘short deal’ or ‘going short’.

By choosing the direction of the deal – Buy or Sell – you can trade regardless if you believe the price will increase or decrease.


Opening a commodity CFD deal with Vestle

Now that we’ve revised a few basic concepts, let’s look at a quick example of how to open a commodity CFD deal on the Vestle platform.
  1. Choose a commodity CFD (oil, gold, cocoa, etc.)
  2. Figure out your deal size (how much you want to invest)
  3. Decide the direction (Buy or Sell)
  4. Click ‘Deal’
A quick reminder:
Of course, opening your deal isn’t enough. You also have to monitor and close it on time, which requires quite a bit of juggling, especially when you have multiple deals opened simultaneously. For this purpose, you can use Stop Loss and Take Profit orders. They allow you to better manage risks and, with the exception of slippage, enable you to dictate when and how your deals will close.

Instrument Sell Buy Change
Instrument Sell Buy Change
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Instrument Sell Buy Change
Instrument Sell Buy Change
Instrument Sell Buy Change
Instrument Sell Buy Change
Instrument Sell Buy Change

What factors can affect the price of commodities?

What factors can affect the price of commodities?

The commodity market can be affected by many factors and they’re not the same for all commodities. Just think about it: Heavy rains in the world’s coffee belt can have a substantial impact on coffee price but are far less likely to affect the global price of platinum.
However, we don’t want to leave you empty handed, so here’s a shortlist of some of the major factors that could affect commodity prices:

  • Politics/geopolitics
  • Weather, especially unusual one
  • OPEC meetings
  • Change in consumer preferences
  • Level of confidence in global economy
  • Trade agreements
  • Development of new technologies

Want to gain further knowledge of commodity trading, CFDs and market events? Register today to access education resource and benefit from a free Demo Account.

Most popular commodity CFDs

Brent Oil
Brent Crude Oil (vs. US Dollar)
Cocoa (vs. US Dollar)
Coffee C (vs. US Dollar)
Copper (vs. US Dollar)
Corn (vs. US Dollar)
Cotton No. 2 (vs. US Dollar)
Gasoline RBOB (vs. US Dollar)
Gold (Spot) oz. vs. US Dollar
Gold (EUR)
Gold (Spot) oz. vs. Euro
Heating Oil
Heating Oil NY Harbor ULSD (vs. US Dollar)
Natural Gas
Henry Hub Natural Gas (vs. US Dollar)
Palladium (vs. US Dollar)
Platinum (Spot) oz. vs. US Dollar
Silver (Spot) oz. vs. US Dollar
Soybeans (vs. US Dollar)
Sugar No. 11 (vs. US Dollar)
Light Sweet Crude Oil (vs. US Dollar)
Wheat (vs. US Dollar)