We found 11 online brokers that are appropriate for Trading Commodities.
Commodity brokers, also called commodities brokers, are firms or individuals who help investors deal in commodity contracts by offering trading platforms, visiting international suppliers, determining delivery details, and whatnot. However, brokers offer this for a preset fee or commission.
They are registered with regulatory authorities of their respective countries for example in the UK the Financial Conduct Authority oversees commodity brokers. In South Africa, on the other hand, commodities are controlled by The Financial Sector Conduct Authority (or the FSCA) of South Africa. In Germany The Federal Financial Supervisory Authority (or BaFin) is responsible for regulating the trade of commodities.
These types of brokers are not restricted to trade on singular or specific commodity exchanges. They can also trade on related exchanges such as the New York Mercantile Exchange and the US’ Chicago Board of Trade. Towards the end of the past decade, investment banks were highly prominent in commodity trading.
The commodities traded on such exchanges consist of wheat, rice, crude oil, natural gas, electricity, soybeans, silver, and gold.
There are numerous ways to find the best commodity brokers, but we discuss the proven ones based on past market reports.
The following are some of the best commodities brokers to look into before choosing one to help with your trades in the Futures markets and financial derivatives markets.
Such online brokers or brokerage firms normally trade on the exchange floor on behalf of customers or traders. They are paid in commissions for their services.
In short, such commodity brokers are referred to as FCM. The broker or the brokerage firm holds their private and commercial clients’ funds to a margin similar to how broker-dealers do.
The introducing broker or the firm never directly holds the client's funds. Instead, they do so through an FCM since traders sometimes prefer not to work with FCMs.
This is where an individual commodities broker or a firm just offers investment advice to traders on commodity trading and works as a power of attorney on their clienteles’ behalf.
A commodity that is equal to a mutual fund is called a commodity pool. The CPO operates under the CTA.
An RCR (or Registered Commodity Representative) or AP (or Associated Person) can be a partner, officer, a CPO employee IB, CTA, or FCM. They are qualified to work with their corporations.
Traders can directly trade commodities via futures contracts, ETFs, CFDs, mutual funds, or the equities market.
Under normal circumstances, commodity traders choose to trade via CFD trading. That is mostly due to the leverage it offers, as well as its smaller contracts. The initial revenue is exceptionally low in comparison to other commodity trading forms, however.
In this type of trading, traders do not need the commodity in physical form. Previously, only grain and livestock were traded, but now an increasing number of commodities have made it into the market, i.e., precious metals, energy, natural gas, bonds, etc.
You can trade commodities in your portfolio in many ways, and each type has its advantages and disadvantages:
The most widespread way of trading commodities is buying and selling contracts on an exchange. In this, an investor agrees with another based on the commodity’s future price.
For instance, an investor may agree to a commodity future contract to invest in ten thousand oil barrels at 45 USD a barrel in thirty days.
When the contract ends, the investor does not transfer the physical goods, instead, they close out their contract by assuming an opposite position via the spot trading market.
Therefore, in this example, once the futures contract ends, the investor would close out the position, agreeing to another contract to sell ten thousand oil barrels at the current market price.
If the spot price turns out to be higher than the investor’s contract price of 45 USD per barrel, they would profit from it, if it is lower, they would lose capital. In contrast, if an investor had agreed to a futures contract to sell oil, they would earn revenue upon the spot price going down, and they would lose capital upon the spot price going up.
At any moment, the investor could close out their position before the contract’s termination date. To be able to invest in futures trading, investors must create a commodity account with a commodity broker UK offering these kinds of trades.
When an investor trades futures contracts, they are not buying or selling the commodity in physical form. Those who trade futures with oil trading commodity brokers do not have millions of oil barrels or cattle herds delivered to them since futures only involve betting on price movements.
For precious metals like silver and gold, however, investors do take possession of the physical commodities. These include gold coins, bars, or jewellery.
Such investments offer them exposure to commodities silver, gold, as well as other precious metals, and let them feel the weight of their investments. Transaction costs are higher with precious metals, however.
Another way you can go about this is to buy the stock of a corporation involved with a commodity. For oil, traders could invest in the stock of drilling or oil refining companies. For grain, they could buy into an agriculture business or one selling seeds.
These particular stock investments track the prices and values of the underlying commodity. If the prices of oil go up, an oil corporation should be lucrative so its share value would go up as well.
Buying commodity stocks come with lower risk compared to investing directly in commodities since the investor is not merely betting on the price of the commodity. A well-established corporation could still earn revenue despite the commodity value falling. This works in all cases, however. Although increased oil prices could help promote an oil firm’s stock price, there are other factors, too, such as their firm management and net market share. In case you are on the hunt for a certain asset that accurately tracks the price of a commodity, buying stocks is not the best match.
Besides physical commodities and whatnot, there are mutual funds, ETFs, and ETNs (or exchange-traded notes) that are contingent on commodities as well. Such funds merge all the funds from numerous private investors to build a large portfolio that can track the value of a commodity or a commodity basket, e.g., an energy mutual fund contingent on several energy commodities. The fund may either buy futures contracts for price tracking or buy the stock of different corporations with exposure to commodities.
By making a small investment, investors can access a larger range of commodities than if they tried to build the portfolio themselves. Besides that, they will also be accompanied by an expert investor overseeing the portfolio. Investors will still have to pay an extra management fee to the commodity fund in contrast to what it may cost them if they had made the investments on their own. Moreover, based on the fund’s methodology, it might not track the commodity price accurately.
Put simply, commodity pools and managed futures are privately held funds known to invest in commodities. They are identical to mutual funds, their only difference being that they are not traded publicly, in which case, investors will need the approval to be able to invest in them.
Such funds can facilitate more complicated strategies compared to mutual funds and ETFs; therefore, they hold the potential for more substantial returns. In return, the management fees may also be higher.
The following are the advantages of investing in commodities:
As time passes, commodity stocks and commodities provide returns that are different compared to other bonds and stocks. A portfolio holding assets that differ from each other can help you manage market volatility better. Note that portfolio diversification, however, does not guarantee against potential loss or secure a profit for that matter.
Inflation can destroy the value of bonds and stocks. It can also lead to loftier commodity prices. Although commodities have displayed solid performance during high inflation periods, investors should keep in mind that commodities can be subject to more volatility compared to other investment types.
Singular commodity prices can go up and down based on international market performance, based on factors like supply and demand, inflation, exchange rates, and the health of the economy, overall. Throughout recent years, a rise in demand as a result of universal infrastructure financial products has affected commodity prices greatly. By and large, an upsurge in commodity prices has positively impacted company stocks in relevant industries.
Commodity trading is a specific strategy that works best for seasoned commodity investors. Before trading commodities, it is crucial to understand how it all works, i.e., how the trading platform works, commodity price charts, and other methods of research.
Since market price movements can result in substantial losses or gains, individual traders must develop a high-risk tolerance to cope with sudden changes. Aside from that, if you do consider investing in commodities with a commodity broker, according to essential advice offered by seasoned traders, it should take up only a portion of your entire portfolio.
We've collected thousands of datapoints and written a guide to help you find the best Commodities Brokers for Commodity Trading for you. Our aim is that this information helps you choose a trustworthy, reputable and professional broker who can satisfy your trading needs online. We have compiled a list of what we consider the best commodities brokers below.
There are a number of important factors to consider when picking an online Commodities trading brokerage.
Our team have listed brokers that match your criteria for you below. All brokerage data has been summarised into a comparison table. Scroll down.
We compare these features to make it easier for you to make a more informed choice.
Here are the top Commodities Brokers.
Compare Commodities Brokers min deposits, regulation, headquarters, benefits, funding methods and fees side by side.
All brokers below are commodities brokers. Learn more about what they offer below.
You can scroll left and right on the comparison table below to see more commodities brokers that accept commodities clients
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IC Markets
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eToro
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Roboforex
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AvaTrade
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XM
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XTB
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Pepperstone
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FP Markets
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Trading212
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Plus500
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EasyMarkets
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Regulation | Australian Securities and Investments Commission (ASIC), Financial Services Authority (FSA), Cyprus Securities and Exchange Commission (CySEC) | Financial Conduct Authority (FCA), Cyprus Securities and Exchange Commission (CySEC), Markets In Financial Instruments Directive (MiFID), Australian Securities and Investments Commission (ASIC) | Cyprus Securities and Exchange Commission (CySEC) | Central Bank of Ireland, Australian Securities and Investments Commission (ASIC), ASIC (406684), Financial Services Authority (FSA), South African Financial Sector Conduct Authority (FSCA), Financial Stability Board (FSB), The Financial Services Agency (JAPAN FSA), Financial Futures Association of Japan (FFAJ), Abu Dhabi Global Markets (ADGM), Financial Regulatory Services Authority (FRSA), Polish Financial Supervision Authority (KNF), Israel Securities Association (ISA), British Virgin Islands Financial Services Commission (BVI), BVI (SIBA/L/13/1049) | Financial Services Commission (FSC), Cyprus Securities and Exchange Commission (CySEC), Australian Securities and Investments Commission (ASIC) | Financial Conduct Authority (FCA), FCA number FRN 522157, Cyprus Securities and Exchange Commission (CySEC), CySEC Licence Number: 169/12, Comisión Nacional del Mercado de Valores, Komisja Nadzoru Finansowego, Belize International Financial Services Commission (IFSC) under license number IFSC/60/413/TS/19, Polish Securities and Exchange Commission (KPWiG), Dubai Financial Services Authority (DFSA), Dubai International Financial Center (DIFC),Financial Sector Conduct Authority (FSCA), XTB AFRICA (PTY) LTD licensed to operate in South Africa | Financial Conduct Authority (FCA), Australian Securities and Investments Commission (ASIC), Cyprus Securities and Exchange Commission (CySEC), Federal Financial Supervisory Authority (BaFin), Dubai Financial Services Authority (DFSA), Capital Markets Authority of Kenya (CMA), Pepperstone Markets Limited is incorporated in The Bahamas (number 177174 B), Licensed by the Securities Commission of the Bahamas (SCB) number SIA-F217 | Australian Securities and Investments Commission (ASIC), Cyprus Securities and Exchange Commission (CySEC) | Financial Conduct Authority (FCA), Financial Supervision Commission (FSC) | Plus500UK Ltd authorized & regulated by the FCA (#509909), Plus500CY Ltd authorized & regulated by CySEC (#250/14), Plus500AU Pty Ltd (ACN 153301681), ASIC in Australia AFSL #417727, FMA in New Zealand, FSP #486026 and Authorised Financial Services Provider in South Africa FSP #47546, Plus500SEY Ltd is authorised and regulated by the Seychelles Financial Services Authority (Licence No. SD039), Plus500SG Pte Ltd (UEN 201422211Z) holds a capital markets services license from the Monetary Authority of Singapore (MAS) for dealing in capital markets products (License No. CMS100648-1), PLUS500AU (PTY) LTD is regulated by the FSCA (Financial Sector Conduct Authority), Plus500 adheres to MiFID rules | Cyprus Securities and Exchange Commission (CySEC), Australian Securities and Investments Commission (ASIC), Financial Services Authority (FSA), British Virgin Islands Financial Services Commission (BVI) |
Min Deposit | 200 | 10 | 1 | 100 | 5 | No minimum deposit | 200 | 100 | 1 | 100 | 100 |
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Used By | 180,000+ | 27,000,000+ | 10,000+ | 300,000+ | 3,500,000+ | 250,000+ | 89,000+ | 10,000+ | 15,000,000+ | 15,500+ | 142,500+ |
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Platforms | MT4, MT5, Mirror Trader, ZuluTrade, Web Trader, cTrader, Mac | Web Trader, Tablet & Mobile apps | MT4, MT5, Mac, Web Trader, cTrader, Tablet & Mobile apps | Web Trader, MT4, MT5, AvaTradeGo, AvaOptions, DupliTrade, ZuluTrade, Mobile Apps, ZuluTrade, DupliTrade, MQL5 | MT4, MT5, Mac, Web Trader, Tablet & Mobile apps | MT4, Mirror Trader, Web Trader, Tablet & Mobile apps | MT4, MT5, TradingView, DupliTrade, myFXbook, Mac, Web Trader, cTrader, Tablet & Mobile apps | MT4, MT5, IRESS, Mac, Web Trader, Tablet & Mobile apps | Web Trader, Tablet & Mobile apps | Web Trader, Tablet & Mobile apps | MT4, MT5, Web Trader, Tablet & Mobile apps |
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Risk Warning | Losses can exceed deposits | 78% of retail investor accounts lose money when trading CFDs with this provider. | Losses can exceed deposits | 71% of retail investor accounts lose money when trading CFDs with this provider | CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.59% 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. | 74% 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. | 74-89 % of retail investor accounts lose money when trading CFDs | Losses can exceed deposits | CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% 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. | 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. | Your capital is at risk |
Demo |
IC Markets Demo |
eToro Demo |
Roboforex Demo |
AvaTrade Demo |
XM Demo |
XTB Demo |
Pepperstone Demo |
FP Markets Demo |
Trading 212 Demo |
Plus500 Demo |
easyMarkets Demo |
Excluded Countries | AF, GN, SL, BW, IR, SY, MM, IQ, TG, KH, LS, YE, CI , LR, ZW, CU, LY, TZ, CG, ML, BO, LR, NE, AO, GM, NG, AG, GH, KR, KG, GN, SN, NA | ZA, ID, IR, KP, BE, CA, JP, SY, TR, IL, BY, AL, MD, MK, RS, GN, CD, SD, SA, ZW, ET, GH, TZ, LY, UG, ZM, BW, RW, TN, SO, NA, TG, SL, LR, GM, DJ, CI, PK, BN, TW, WS, NP, SG, VI, TM, TJ, UZ, LK, TT, HT, MM, BT, MH, MV, KZ, GD, FJ, BB, BM, BS, AG, AI, AW, LB, SV, PY, HN, GT, PR, NI, VG, AN, | US, JP | BE, BR, KP, NZ, TR, US, CA, SG | US, CA, IL, KR, IR, MM, CU, SD, SY | US, IN, PK, BD, NG , ID, BE, AU | AF, AS, AQ, AR, AM, AZ, BY, BE, BZ, BT, BA, BI, CM, CA, CF, TD, CG, CI, ER, GF, PF, GP, GU, GN, GW, GY, HT, VA, IR, IQ, JP, KZ, LB, LR, LY, ML, MQ, YT, MZ, MM, NZ, NI, KP, PS, PR, RE, KN, LC, VC, WS, SO, GS, KR, SS, SD, SR, SY, TJ, TN, TM, TC, US, UY, VU, VG, EH, YE, ZW | US, JP, NZ | US, CA | MY, BE, US, CA, CN, ID, PH, TG, NG, DO, MA, ZW, PR, TZ, TN, UG, BW, AO, AE | US, IL, BC, MB, QC, ON, AF, BY, BI, KH, KY, TD, KM, CG, CU, CD, GQ, ER, FJ, GN, GW, HT, IR, IQ, LA, LY, MZ, MM, NI, KP, PW, PA, RU, SO, SS, SD, SY, TT, TM, VU, VE, YE |
You can compare Commodities Brokers ratings, min deposits what the the broker offers, funding methods, platforms, spread types, customer support options, regulation and account types side by side.
We also have an indepth Top Commodities Brokers for 2022 article further below. You can see it now by clicking here
We have listed top Commodities brokers below.
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% 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 is not an indication of future results.
Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework.
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.