The basic definition of a commodity is any item that can be bought and later resold. Most of today’s widely traded commodities are strategic resources such as oil, natural gas, precious metals and staple products. The commodities markets are global and respond rapidly to changes in supply and demand. Commodity prices can rise and fall rapidly in response to economic, political and natural events. Commodities traders pay particular attention to fundamental analysis when they attempt to predict the future performance of assets.
The Basic Principles of Commodities Trading
Commodities trading is like any other form of transaction. The goal is to buy Commodities at a low price and sell them at a high price.
FOR EXAMPLE:
Gold is quoted at $1,284.78 (Bid price) and $1,285.63 (Ask price). You buy 10 ounces at $1,285.63 per ounce. After 1 week you close (sell) your position and earn a profit of $226.5
How is that possible?
A week after you opened your position, gold was quoted at $1,308.28 (Bid price) to $1,309.13 (Ask price). When you bought your 10 ounces (using our leverage) they cost $12,856.3.
You sold them for $13,082.8.
So you earned $226.5.
You can trade the world’s major commodities as CFDs on the FTSE100 platform. When you open a CFD position on a commodity, you are not buying the underlying asset; instead, you are investing on the changes in the commodities’ market price.
Below are FTSE100 most popular commodities:
FTSE100 traders can use up to x200 leverage to boost their initial investments and gain a high level of market exposure. Leverage enables you to aim for significant profits while utilising modest investment capital. We strongly recommend that you visit our Education Center to learn how to use leverage effectively.
Commodities trading encompasses a diverse range of assets with different risk levels. Gold and Oil are often volatile, but even more stable commodities can experience sudden price changes in response to global events. FTSE100 gives you all the tools and advanced platform features that you need to trade commodities effectively. We also provide you with live data feeds, news and analysis, professional charts and trading signals.
Online Commodity trading is already a highly popular form of investment with millions of traders worldwide. Almost anybody can trade Commodities if they are willing to apply the basic principles of risk management. The FTSE100 online Education Center contains all the learning tools and educational resources that you need to begin online Commodity trading.
Many of FTSE100 top investors signed up as absolute beginners with no experience of the financial markets. They used the Education Center and free Demo Account to master the basics of Commodity trading. Commodity traders range from novice investors who trade part time, to expert investors who manage complex personal portfolios on a full time basis. The FTSE100 platform gives you the freedom to set your own financial goals and manage your own investments.
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