We found 11 online brokers that are appropriate for Trading Commodity Price Risk Investment Platforms.
It is common knowledge among investors that the financial market is volatile and risky which differs across markets and products. Similarly, the commodity market is not free of risk. The change in prices of commodities also results in higher risks for the relevant investment, where a higher price would make it difficult for investors to purchase the goods. In this article, we will delve into the various types of commodity price risks and how investors are affected by such risks.
First, let us understand the concept of commodity price risk through a simple example. For example, if the price of wood increases, a furniture maker would need to reciprocate this increase in wood prices by increasing the price of his furniture. Another choice of action for the furniture maker would be to compromise with a lower profit. It is clear that if the price of commodities falls, sellers would suffer a loss or may not earn as expected. Therefore, if the prices of crops fall, a farmer may lose money for his harvest. Both examples are a type of commodity price risk. To overcome the consequences of commodity price risk, most companies hedge it either with commodity options or commodity futures on exchanges like Chicago Mercantile Exchange.
Commodity price risk affects both buyers and sellers, but in different ways. With the change in price, either the buyer is at risk or the seller. This concept will be further explained below:
Buyers are at a risk when the commodity price rises unexpectedly. Increase in commodity prices can increase the profit margin and affect the overall budget. Let's say an automobile manufacturer finds a price rise in commodities like rubber or steel. This will make its produced cars expensive. In response, the automobile manufacturer may either increase the price of the cars or suffer a slight loss in the profits.
Producers will also face the same commodity price risk with a fall in the price unexpectedly. This results in lower profits. Oil producers are the best examples as oil prices fluctuates frequently, causing their potential profits to fluctuate. Oil companies have stated that their income would drop by $2 billion if there is a fall in the price of oil by just ten dollars a barrel. In fact, between June 2014 and January 2016, the price drop was more than $70 a barrel, which would result in a downfall of operating cash flow by about $17.5 billion.
Most of the companies hedge the commodity price risk through options contracts and futures which help to reduce price uncertainties.
There are various factors responsible for commodity price risk. Such factors include weather, seasons, politics, market condition, and technology which will be explained in detal:
Political factors can increase and reduce the prices of commodities. In 2018, US President Donald Trump imposed tariffs on aluminum and steel imported from other countries to make these more expensive in the country. China retaliated against this and imposed tariffs on agricultural goods imported from the US. This led to the drop in prices of several crops in the US.
Weather fluctuations impact the prices of commodities severely as they affect the supply of crops. For example, with floods and droughts, a price rise of commodities will be expected due to the reduced crop supply.
Technology is an important factor in influencing the prices of commodities. In the 19th and 20th centuries, aluminium was considered precious and was priced relatively highly. Today, with the advancement of technology, its value has reduced which caused a massive drop in its prices.
In this article, we evaluated the causes for the rise and fall of commodity prices and the significant factors that lead to such commodity price risk. The price of commodities fluctuates frequently and sometimes unexpectedly, as in the case of oil. The rise in the price means the product becomes expensive for buyers, while the drop in the price would lead to a profit cut or loss for sellers. To overcome huge losses, most big companies hedge it through options or futures in commodity exchanges.
With today’s global economic scenario, commodity trading has become one of the favorite methods for investors to achieve far better returns than equities. Therefore, investors are recommended to closely follow geopolitical news and events, and to build trading strategies accordingly to increase their profits.
We've collected thousands of datapoints and written a guide to help you find the best Commodity Price Risk for you. We hope this guide helps you find a reputable broker that matches what you need. We list the what we think are the best Commodity Price Risk Investment Platforms below. You can go straight to the broker list here.
There are a number of important factors to consider when picking an online Commodity Price Risk Investment Platforms 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 Commodity Price Risk Investment Platforms.
Compare Commodity Price Risk Investment Platforms min deposits, regulation, headquarters, benefits, funding methods and fees side by side.
All brokers below are Commodity Price Risk Investment Platforms. Learn more about what they offer below.
You can scroll left and right on the comparison table below to see more Commodity Price Risk Investment Platforms that accept Commodity Price Risk Investment Platforms clients
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eToro
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IC Markets
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XTB
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AvaTrade
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FP Markets
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Pepperstone
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EasyMarkets
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XM
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Plus500
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FXPrimus
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SpreadEx
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Regulation | Financial Conduct Authority (FCA), Cyprus Securities and Exchange Commission (CySEC), Markets In Financial Instruments Directive (MiFID), Australian Securities and Investments Commission (ASIC) | Australian Securities and Investments Commission (ASIC), Financial Services Authority (FSA), Cyprus Securities and Exchange Commission (CySEC) | 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) | Central Bank of Ireland, Australian Securities and Investments Commission (ASIC), Financial Services Authority (FSA), South African Financial Sector Conduct Authority (FSCA), Financial Stability Board (FSB), Abu Dhabi Global Markets (ADGM), Financial Regulatory Services Authority (FRSA), British Virgin Islands Financial Services Commission (BVI) | Australian Securities and Investments Commission (ASIC), Cyprus Securities and Exchange Commission (CySEC) | Financial Conduct Authority (FCA), Australian Securities and Investments Commission (ASIC), 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 | Cyprus Securities and Exchange Commission (CySEC), Australian Securities and Investments Commission (ASIC) | International Financial Services Commission (IFSC), Cyprus Securities and Exchange Commission (CySEC), Australian Securities and Investments Commission (ASIC) | 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 | Cyprus Securities and Exchange Commission (CySEC), Markets In Financial Instruments Directive (MiFID) | Financial Conduct Authority (FCA) |
Min Deposit | 200 | 200 | No minimum deposit | 250 | 100 | 200 | 100 | 5 | 100 | 100 | 1 |
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Used By | 20,000,000+ | 180,000+ | 250,000+ | 200,000+ | 10,000+ | 10,000+ | 142,500+ | 3,500,000+ | 15,500+ | 10,000+ | 10,000+ |
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Platforms | Web Trader, Tablet & Mobile apps | MT4, MT5, Mirror Trader, ZuluTrade, Web Trader, cTrader, Mac | MT4, Mirror Trader, Web Trader, Tablet & Mobile apps | Web Trader, MT4, MT5, AvaTradeGo, AvaOptions, Mac, Mobile Apps, ZuluTrade, DupliTrade, MQL5 | MT4, MT5, IRESS, Mac, Web Trader, Tablet & Mobile apps | MT4, MT5, Mac, ZuluTrade, Web Trader, cTrader, Tablet & Mobile apps | MT4, Web Trader, Tablet & Mobile apps | MT4, MT5, Mac, Web Trader, Tablet & Mobile apps | Web Trader, Tablet & Mobile apps | MT4, Mac, Mirror Trader, Web Trader, Tablet & Mobile apps | Web Trader, Tablet & Mobile apps |
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Risk Warning | 67% of retail investor accounts lose money when trading CFDs with this provider. | Losses can exceed deposits | 79% 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. | 72% of retail investor accounts lose money when trading CFDs with this provider | Losses can exceed deposits | CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79.3% 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 | Your capital is at risk | Your capital is at risk | 72% 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. | Losses can exceed deposits | Losses can exceed deposits |
Demo |
eToro Demo |
IC Markets Demo |
XTB Demo |
AvaTrade Demo |
FP Markets Demo |
Pepperstone Demo |
easyMarkets Demo |
XM Demo |
Plus500 Demo |
FXPrimus Demo |
SpreadEx Demo |
Excluded Countries | IR, KP, BE, CA, JP, SY, TR, IL, BY, AL, MD, MK, RS, GN, CD, SD, 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, US, PY, HN, GT, PR, NI, VG, AN, | 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 | US, IN, PK, BD, NG , ID, BE | BE, BR, KP, NZ, TR, US, CA, SG | US, JP, NZ | BR, KR, IR, IQ, SY, JP, US | US | US, CA, IL, KR, IR, MM, CU, SD, SY | MY, BE, US, CA, CN, ID, PH, TG, NG, DO, MA, ZW, PR, TZ, TN, UG, BW, AO, AE | AF, CI, CU, IQ, IR, LY, MM, KR, SD, PR, US, AU, SY, DZ, JP, EC. | US, TR |
You can compare Commodity Price Risk Investment Platforms 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 Commodity Price Risk Investment Platforms for 2021 article further below. You can see it now by clicking here
We have listed top Commodity Price Risk Investment Platforms below.