Commodities Brokers & How to Trade Commodities in 2022

Rebecca Smith

Rebecca Smith

Rebecca is TopBrokers Trade’s utmost dedicated, and skilled individual. 12 years in the marketing field. Focusing as a content and digital marketing administrator, in the Finance sector.

Introduction

The international market got more interesting with opportunities for trading commodities. Previously, people traded commodities as daily staples. Agricultural produce, natural resources, Precious metals, and a host of others were regular trading assortments. However, with the advent of online trading platforms, commodities trading has a certain digitalization.

This article will give you an exciting thrill into what are commodities? Also, commodities definition/trading and commodities brokers. So keep reading to learn more!

What are commodities brokers?

Commodity brokers are firms or individuals who trade commodities for people and charge a commission in exchange for their services. When the commodity trader trades for himself, he is called a commodity trader. But when he trades for another, he becomes a broker. 

What do commodities brokers do?

Commodities brokers are usually interested in the price fluctuations of everyday staples or products. As a result, they exploit these price changes to profit from their speculations. The reason is that there is often high volatility in commodities prices. 

Perhaps they are often in high demand since the human population depends heavily on them for survival. Essentially, commodities brokers are trade intermediaries between the international market and regular people. 

What is commodities trading?

If we are going to be talking about commodities brokers, then it is pretty relevant to discuss their line of business–Commodities trading.

To this end, commodities trading is an indirect type of trading that allows people to trade commodities without owning them. Essentially, there is more population for online commodities traders because it is, in a sense, less cumbersome. Therefore more people can learn how to buy commodities. 

Here is what we mean! 

If you wanted to trade Oil the traditional way, you would have to own some barrels. Also, you will have to arrange to transport your oil barrels to your buyer, etc. But with trading commodities online, you do not have to own or worry about cargo transportation. Your commodities brokers facilitate your trading experience through a platform that allows you to only trade price action–changes or fluctuations in the prices of commodities.

Types of commodities traded

There are chiefly two categories of tradable commodities: soft and hard commodities.

Essentially, soft commodities are farm produce that requires the farmer’s care and attention. Most soft commodities are easily affected by environmental elements, population trends, etc. 

As a result, trading commodities requires careful attention to the market makers and other factors affecting the demand and supply of soft commodities. This way, you are well equipped with knowledge about the best time to invest for profitability. Examples of soft commodities include but are not limited to; coffee, wheat, cotton, pork, sugar, etc.   

On the contrary, hard commodities are more durable mineable resources like precious metals, Oil, Gas, and other natural resources. Generally, hard commodities have a more stable price than soft commodities. However, the demand and supply of hard commodities can also be affected by a natural disaster, political strife, etc. 

Review of the best commodities brokers

At Topbrokerstrade, eToro is one of our favorite brokers for trading commodities and offers a tradable assortment. They have a proven track record and have been in business since 2007 with over 13 million users. 

They are multi regulated by the financial conduct authority (FCA), Cyprus Securities and exchange commission (CySEC), Markets in financial instruments directive (MiFID), and Australian securities and investment commission (ASIC). As a result, they are among the most trustworthy brokers in 2022. 

They have gained widespread recognition because of their unique blend of social trading features and assorted tradable- commodities, Forex, CFD, stocks, etc. As a commodity broker, eToro offers 15 hard and soft commodities.

What’s more? eToro offers trading for uncommon metals like platinum and nickel. Also, you can trade Oil through CFDs and futures contracts for even more profitability.

Your investment opportunities with eToro are limitless and free of commission when you open an account. Also, their CFD spreads are about the lowest you can find, with copper CFDs at two pips which is 0.02% per trade. Oil goes for five pips per trade and gold for 45 pips per trade. 

Furthermore, eToro is one broker that gives you the ultimate social experience. The reason is that they are all about social trading, which is enhanced by their copy trading feature. The beauty of copy trading is that you can automate your trades by copying professional traders. As a result, you do not need to be an expert trader or investor to benefit from this broker

You can leverage its massive inbuilt social network, trading, collaborating, and connecting with people of the same interests. Moreover, they offer one of the best trading apps and are compatible with web trading, tablets, and mobile platforms. As a result, there is an amazing user experience because of their responsive customer support service–To give you that personalised feeling. 

PROS

  • Minimum deposit of $10
  • Social trading features
  • Copy-trading enabled
  • Supports trading commodities
  • Highly regulated
  • Supports a wide tradable assortment
  • Very low spreads
  • Trades rare metals like nickel and platinum
  • Demo account
  • Supports live chat and customer support

CONS

  • 67% investor risk with CFD trading
  • Not accessible to all countries
  • Inactivity fees

Avatrade is one of the top commodity brokers, providing investors with approximately 24 commodities with CFDs. This broker is well known for their Top-notch educational resources because they are focused on talent development and skill. 

The Central Bank of Ireland, BVI, FSCA, ASIC, ADGM-FSRA, FSA/FFAJ, ISA regulate them. Also, they have an Irish headquarters. As a result, having been established in 2007, they have remained long enough in business to earn global trust. Although the minimum deposit is $100, it is equally competitive with other standard broker amounts. 

What’s more? Avatrade operates several trading platforms like MT4, MT5, WebTrader, AvaOptions, AvaTradeGO, Ava Social to give users a wide array of online options when you open your trading account

Additionally, there are also social trading platforms from Avatrade to create that balanced user experience. For instance, there is the 24/7 customer support service and translation in over 14 languages, a trading academy with the best educational tools and resources on market analysis, and a host of other trade-relevant concepts. 

As a result, Avatrade remains one of the best brokers, especially for new traders who may not understand the volatility of trading commodities and the commodities market. 

Furthermore, Avatrade offers you trading assets of about 55 currency pairs, 16 cryptocurrency pairs, 27 commodities, and 31 CFDs to trade. That way, there is always an option for you to trade with your Avatrade account.

Avatrade has won several awards for providing trading value to their clients, especially with navigating the nuances of commodities trading and the commodities market. As a result, Avatrade users enjoy one of the best leverage systems alongside competitive and low spreads for trading stocks, Commodities, Bonds, ETFs, etc.  

PROS

  • Top-notch educational resources
  • Low spreads and high leverage
  • Meta trader 4 and 5 trading platforms
  • Supports trading commodities
  • Excellent customer service
  • Well regulated broker 

CONS

  • 71% investor risk with CFD trading
  • High inactivity fees
  • A minimal selection of agricultural commodities 

Conclusion

Although trading commodities and the commodities market offer an assortment of avenues for financial investment, it requires some know-how to make a profit. That’s where knowing the best commodities brokers come in handy! Essentially, several investors lose close to 60% as risk on commodities trading via CFDs. Therefore, at Topbrokerstrade, we help you make the right choice for your financial future. 

Now that you know:  What are commodities? How to buy commodities? Essential information about the commodities market, and the top brokers for commodities trading, you can navigate the international market and take part in trading commodities for better profitability.

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