CFD commodity trading is a simple and accessible way for investors to speculate on the price movement of various commodities, from precious metals to energies. Traders do not own the underlying commodities when they invest in a CFD, which means that there is no need to worry about storing or selling commodities like coffee and gold.
This guide will explain how CFD commodity trading works with detailed examples, while also running through popular assets. Read on for tips on how to get started, as well as a list of the top brokers offering online CFD commodity trading in the UK.
Best CFD Commodities Brokers
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Our picks at a glance
- 1 Pepperstone Top score: Platforms 4.8 Info Visit Pepperstone
- 2 XTB Top score: Trust 4.8 Info Visit XTB
- 3 Spreadex Top score: Mobile 4.5 Info Visit Spreadex
- 4 Interactive Brokers Top score: Trust 4.6 Info Visit Interactive Brokers
- 5 IG Top score: Fees 4.5 Info Visit IG
- 6 Trade Nation Top score: Support 4.4 Info Visit Trade Nation
- 7 Eightcap Top score: Mobile 4.6 Info Visit Eightcap
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Our top pick
In our recent assessment, Pepperstone remains a top-tier CFD broker, renowned for its speed and reliability. With execution times averaging 30ms and a remarkable 99.90% fill rate, traders benefit from a smooth experience free from requotes and dealing desk disruptions. Additionally, it offers extensive opportunities with access to more than 1,300 assets.
- FTSE Spread
- 1.0
- GBPUSD Spread
- 0.4
- Leverage
- 1:30 (Retail), 1:500 (Pro)
- Stocks Spread
- 0.02
- FCA Regulated
- Platforms
- Pepperstone Trading Platform, MT4, MT5, cTrader, TradingView
CFDs and FX are complex instruments and come with a high risk of losing money rapidly due to leverage. 73-89% of retail investor accounts lose money when trading CFDs.
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XTB provides an extensive range of CFDs, including forex, indices, commodities, stocks, ETFs, and cryptocurrencies, subject to location. EU and UK clients have leverage up to 1:30, whereas global users and pro traders can obtain up to 1:500. XTB excels in offering valuable resources and tutorials for short-term CFD trading strategies.
- FTSE Spread
- 1.8
- GBPUSD Spread
- 1.4
- Leverage
- 1:30 (Retail), 1:200 (Pro)
- Stocks Spread
- 0.2%
- FCA Regulated
- Platforms
- xStation
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 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
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Trade CFDs on Spreadex's extensive range of instruments, offering leverage up to 1:30 and competitive spreads. Although spread betting is their unique selling point, the favourable trading conditions and broad market selection make them an excellent option for CFD trading as well.
- FTSE Spread
- 1.0
- GBPUSD Spread
- 0.9
- Leverage
- 1:30 (Retail), 1:200 (Pro)
- Stocks Spread
- 0.15%
- FCA Regulated
- Platforms
- Spreadex Platform, TradingView, AutoChartist
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The platform provides access to over 8,000 CFDs across stocks, indices, forex, and commodities. Suited for experienced traders, the TWS platform includes more than 100 order types and algorithms. It also delivers top-tier market data from trusted sources like Reuters and Dow Jones.
- FTSE Spread
- 0.005% (£1 Min)
- GBPUSD Spread
- 0.08-0.20 bps x trade value
- Leverage
- 1:30
- Stocks Spread
- 0.003
- FCA Regulated
- Platforms
- Trader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, TradingView, eSignal, TradingCentral, ProRealTime, Quantower
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IG provides over 17,000 CFDs, giving traders more opportunities than most brokers. Investors can trade long or short on key markets such as equities, forex, commodities, and cryptocurrencies. Additionally, customised price alerts and the IG Academy enrich the trading experience.
- FTSE Spread
- 1.0
- GBPUSD Spread
- 0.9
- Leverage
- 1:30 (Retail), 1:222 (Pro)
- Stocks Spread
- 0.02
- FCA Regulated
- Platforms
- Web, L2 Dealer, MT4, TradingView, AutoChartist, TradingCentral, ProRealTime
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
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Trade leveraged CFDs on 1,000+ assets, benefiting from competitive spreads. Utilise the broker's integrated signals to decide optimal entry and exit points.
- FTSE Spread
- From 0.4
- GBPUSD Spread
- From 0.6
- Leverage
- 1:30 (Retail), 1:200 (Pro)
- Stocks Spread
- Variable
- FCA Regulated
- Platforms
- TN Trader, MT4, TradingView
73.8% of retail investor accounts lose money when trading CFDs with this provider.
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Eightcap provides an extensive selection of trading options with over 800 CFDs covering equities, indices, bonds, commodities, and digital currencies, subject to regional availability. Traders can access leverage ranging from 1:30 to 1:500. The platform is distinguished by its sophisticated tools, including an AI-powered economic calendar that tracks over 25 countries with filters for varying impact levels. Despite these strengths, Eightcap's selection of commodities, especially softs such as cotton and wheat, along with its range of precious metals and energy assets, remains limited and could benefit from further development.
- FTSE Spread
- 1.2
- GBPUSD Spread
- 0.1
- Leverage
- 1:30 (Retail), 1:200 (Pro)
- Stocks Spread
- 0.03 (Apple Inc)
- FCA Regulated
- Platforms
- MT4, MT5, TradingView, TradeLocker
Services are provided subject to applicable laws and regulations. Certain products, services, instruments, platforms or payment methods may not be available to residents of certain jurisdictions.
Compare
Safety Comparison
Compare how safe the CFD Commodity Trading are and what features they offer to protect traders.
| Broker | Trust Rating | FCA Regulated | Negative Balance Protection | Guaranteed Stop Loss | Segregated Accounts |
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4.6 | ||||
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4.6 | ||||
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4.0 | ||||
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4.7 | ||||
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4.4 | ||||
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4.3 | ||||
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4.3 |
Payments Comparison
Compare which popular payment methods the CFD Commodity Trading support and whether they have trading accounts denominated in British Pounds (GBP).
| Broker | GBP Account | Debit Card | Credit Card | Neteller | Skrill | Apple Pay |
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Mobile Trading Comparison
How good are the CFD Commodity Trading at mobile trading using apps or other mobile interfaces.
| Broker | Mobile Apps | iOS Rating | Android Rating | Smart Watch App |
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iOS & Android | 4.4 | 4.1 | |
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iOS & Android | 4.7 | 4.1 | |
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iOS & Android | 4.5 | 4.5 | |
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iOS & Android | 4.3 | 4.5 | |
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iOS & Android | 4.6 | 4.0 | |
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iOS & Android | 4.5 | 4.5 | |
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iOS & Android | 4.8 | 4.4 |
Beginners Comparison
Are the CFD Commodity Trading good for beginner traders, that might want an affordable setup to get started, along with good support and educational resources?
| Broker | Demo Account | Minimum Deposit | Minimum Trade | Support Rating | Education Rating |
|---|---|---|---|---|---|
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$0 | 0.01 Lots | 4.6 | 4.0 | |
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$0 | 0.01 Lots | 4.3 | 3.8 | |
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£0 (but £5 minimum for standard payment methods) | £0.01 | 4.3 | 4.0 | |
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$0 | $1 | 3.0 | 4.3 | |
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$0 | 0.01 Lots | 4.5 | 4.8 | |
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$0 | 0.1 Lots | 4.9 | 4.2 | |
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£100 | 0.01 Lots | 4.0 | 3.5 |
Advanced Trading Comparison
Do the CFD Commodity Trading offer features that allow for more advanced trading strategies?
| Broker | Automated Trading | Pro Account | Leverage | VPS | AI | Low Latency | Extended Hours |
|---|---|---|---|---|---|---|---|
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Expert Advisors (EAs) on MetaTrader, cBots on cTrader | 1:30 (Retail), 1:500 (Pro) | |||||
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- | 1:30 (Retail), 1:200 (Pro) | |||||
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1:30 (Retail), 1:200 (Pro) | ||||||
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TWS API | 1:30 | |||||
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Expert Advisors (EAs) on MetaTrader, build your own on ProRealTime | 1:30 (Retail), 1:222 (Pro) | |||||
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Expert Advisors (EAs) on MetaTrader | 1:30 (Retail), 1:200 (Pro) | |||||
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TradingView Bots | 1:30 (Retail), 1:200 (Pro) |
Detailed Rating Comparison
Use this heatmap to compare our detailed ratings for all of the CFD Commodity Trading.
| Broker | Trust | Platforms | Mobile | Assets | Fees | Accounts | Support | Research | Education |
|---|---|---|---|---|---|---|---|---|---|
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4.6 | 4.8 | 4.3 | 4.6 | 4.5 | 4.0 | 4.6 | 4.3 | 4.0 |
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4.6 | 4.0 | 4.4 | 4.6 | 3.9 | 4.0 | 4.3 | 4.1 | 3.8 |
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4.0 | 4.3 | 4.5 | 4.5 | 4.0 | 3.8 | 4.3 | 4.3 | 4.0 |
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4.7 | 3.9 | 4.4 | 4.7 | 4.3 | 3.9 | 3.0 | 4.7 | 4.3 |
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4.4 | 4.8 | 4.3 | 4.5 | 5.0 | 4.0 | 4.5 | 4.9 | 4.8 |
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4.3 | 3.9 | 4.5 | 3.7 | 4.3 | 4.2 | 4.9 | 3.9 | 4.2 |
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4.3 | 4.3 | 4.6 | 3.6 | 3.8 | 4.0 | 4.0 | 3.5 | 3.5 |
Our Take On Pepperstone
Pepperstone excels in trading with tight spreads, swift execution, and advanced charting for seasoned traders. Beginners enjoy zero minimum deposit, comprehensive educational materials, and outstanding 24/5 support, including 18-hour weekend assistance.
Tobias Robinson Reviewer
Pros
- Support for top-tier charting platforms such as MT4, MT5, TradingView, and cTrader. These tools accommodate different short-term trading methods, including algorithmic trading.
- Pepperstone offers pre-IPO perpetual futures, adding Anthropic in October 2026, enabling 24/7 speculation on expected share prices through cash-settled CFDs.
- In recent years, Pepperstone has significantly enhanced the deposit and withdrawal process. By 2025, clients can use Apple Pay and Google Pay, while 2024 saw the introduction of PIX and SPEI for customers in Brazil and Mexico.
Cons
- Overnight holding fees exceed those of some Market Maker brokers (typically Benchmark + 2.5%). Pepperstone suits traders and forex scalpers well but is less ideal for swing traders who keep positions open overnight.
- Execution might not appear as dependable in rapid markets as headline speeds imply. Our tests showed swift execution at targeted prices. However, community feedback highlights concerns over slippage, stop-loss fills, and order triggers sensitive to spreads amid volatility.
- Although the market range has expanded, crypto CFD options remain somewhat restricted, especially when compared to specialised brokers like Eightcap. Additionally, there is no facility to invest in actual cryptocurrencies.
73-89% of retail investor accounts lose money when trading CFDs with this provider.
Our Take On XTB
XTB excels for novice traders with its superb xStation platform, minimal trading costs, no required deposit, and outstanding educational resources, many of which are fully integrated into the platform.
William Berg Reviewer
Pros
- In 2026, XTB expanded its asset offerings and markets. It introduced options trading in Spain and Germany, launched spot cryptocurrencies in select regions, and unveiled Investment Plans 2.0. These enhanced plans now feature more pre-built options, including sectors like Defence, a user-friendly interface, and increased flexibility to mix stocks and ETFs within individual plans.
- The xStation platform stands out with its user-friendly design and intuitive tools, such as adaptable news feeds, sentiment heatmaps, and a trader calculator. These features streamline the learning process for new traders.
- XTB offers a superb array of educational resources, such as training videos and articles, embedded within the platform to assist traders of all experience levels.
Cons
- XTB lacks a raw spread account, a feature increasingly offered by competitors such as Pepperstone. This omission might not satisfy traders seeking the most competitive spreads.
- The demo account lasts only four weeks, posing a challenge for traders wanting to fully explore the xStation platform and refine short-term strategies before investing actual money.
- XTB has stopped supporting MT4, restricting traders to its own platform, xStation. This decision may discourage experienced traders accustomed to using the MetaTrader suite.
74% of accounts lose money when trading CFDs with this provider.
Our Take On Spreadex
Spreadex attracts UK traders keen on spread betting in financial markets and traditional sports wagers. It offers low fees for short trades, and spread bet profits are tax-free. With a robust charting platform and no minimum deposit, it's easy to begin.
Tobias Robinson Reviewer
Pros
- Spreadex has integrated Autochartist-powered trading signals into its desktop platform. This offers real-time, pattern-based insights aimed at assisting active traders in spotting potential opportunities.
- During live trials near London, Spreadex exhibited 120–200ms round-trip latency across over 50 FTSE and EUR/USD trades. There were no requotes, and slippage remained largely controlled under normal market conditions.
- Over 10,000 instruments and superior access to AIM small-caps are available, including exclusive offerings not found with larger brokers. This provides UK-centric traders with enhanced opportunities in niche small-cap configurations.
Cons
- Spreadex requires real funds initially, offering no demo accounts. Few spread betting brokers neglect to accommodate new traders in this manner.
- CFDs, financial spread bets, sports, and casino activities are combined in one account balance. For serious traders, this means non-trading losses can immediately decrease the margin for trading positions.
- Execution is satisfactory, though not top-tier. Tests showed 0.2–0.4 pip slippage in stable liquid markets, but news-induced volatility increased some fills to around 1 pip. Thinner AIM stocks often experienced 2–4 point slippage.
Our Take On Interactive Brokers
Interactive Brokers ranks highly for seasoned traders due to its robust charting platforms, live data, and bespoke layouts via the new IBKR Desktop app. Its competitive pricing and sophisticated order choices appeal to traders, and its wide equity options are industry-leading.
Tobias Robinson Reviewer
Pros
- IBKR is a highly respected brokerage, regulated by top-tier authorities, ensuring the integrity and security of your trading account.
- Interactive Brokers has introduced a single platform linking prediction markets on Kalshi, CME Group, and ForecastEx. Users can trade yes/no contracts on political, economic, and climate events, with fixed $1 payouts. Enjoy 24/6 market access and earn interest on eligible positions.
- The TWS platform is tailored for intermediate and advanced traders, featuring over 100 order types and a dependable real-time market data feed with exceptional uptime.
Cons
- TWS has a steep learning curve, making it difficult for newcomers to navigate and grasp its features.
- IBKR offers a variety of research tools, but their inconsistent placement across trading platforms and the 'Account Management' webpage creates a confusing experience for users.
- Support can be sluggish and frustrating. Tests reveal that you may face challenges reaching customer service quickly, which could result in delays in issue resolution.
Our Take On IG
IG offers a complete package: an easy-to-use web platform, top-tier beginner education, enhanced charting via TradingView, up-to-date data, and strong trade execution for seasoned traders.
Tobias Robinson Reviewer
Pros
- IG excels with its diverse instruments, offering stocks, forex, indices, commodities, and cryptocurrencies. Additionally, it provides US-listed futures, options, and an AI Index, ensuring varied diversification opportunities.
- IG plans to broaden its offering with prediction markets on politics, sport and entertainment in the UK, subject to a gambling licence, with further regions potentially to follow.
- IG secured a crypto asset license from the FCA, enabling its return to the UK market. It now offers buying, selling, and storage services for over 55 digital tokens with fees starting at 1.49%, all under FCA regulation.
Cons
- Beginners may find IG's fees complicated, as they vary depending on the trades or services. This could cause confusion and unexpected costs.
- IG has ended its swap-free account, diminishing its attractiveness to Islamic traders.
- IG imposes a monthly inactivity fee of $12 to $18 after two years, discouraging occasional investors.
70% 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.
Our Take On Trade Nation
Trade Nation caters to discretionary traders aiming to speculate on major indices like the US 500 or liquid FX pairs, with the certainty of fixed spreads. Our tests revealed the TN Trader's fixed spreads to be advantageous, especially during economic announcements, thanks to its dependable charting and capped spreads.
Tobias Robinson Reviewer
Pros
- Trade Nation's 2026 alliance with Volt has streamlined payments for Australian traders, enabling instant deposits and withdrawals via PayID. Faster payout features are also anticipated for UK and EU clients.
- The broker expanded into Europe after receiving CMVM approval in Portugal, enhancing protections for European clients.
- During tests of the TN Trader account in standard market conditions, fixed spreads remained stable. Major forex pairs experienced prompt order fills, albeit with slight entry level drift as prices fluctuated between click and execution.
Cons
- Offshore SCB and FSA firms offer retail investors leverage up to 1:200 and 1:500. In contrast, regions like the UK, Europe, and Australia cap leverage at 1:30. Thus, an FSA client can access 16 times more exposure than a UK retail client on identical trades. However, this comes with reduced oversight and no compensation schemes.
- The FCA, CMVM, and ASIC clients are ineligible for the 2–20% rebate scheme. Consequently, active traders in these areas cannot receive transaction rebates.
- There is no raw or ECN pricing tier, often favoured by traders. Regardless of your deposit or trading volume, you receive the same fixed (or variable on MT4) pricing as novices, rendering it particularly unsuitable for scalpers.
73.8% of retail investor accounts lose money when trading CFDs with this provider.
Our Take On Eightcap
Eightcap excels for traders, offering diverse charting platforms, educational Labs, and AI tools. With over 120 crypto CFDs, it stands out in crypto trading and has won our 'Best Crypto Broker' award twice consecutively.
William Berg Reviewer
Pros
- Eightcap has excelled in all essential trading areas, surpassing all rivals to clinch our 'Best Overall Broker' award for 2024. It also earned the titles of 'Best Crypto Broker' and 'Best TradingView Broker' for 2025.
- In 2026, Eightcap integrated TradeLocker in select areas, establishing itself as the premier regulated broker for this platform. It continues to offer ultra-fast execution and competitive fees for active traders using the charting software.
- Eightcap has launched GOLD247, offering 24/7 gold/USD CFD trading with up to 1:20 leverage, 0.01-lot minimums and zero commission for weekend gold traders.
Cons
- Despite the growing range of tools available, Eightcap lacks popular industry resources such as Autochartist and Trading Central. These provide advanced charting analytics, live news, and essential market insights for traders focused on short-term strategies.
- Eightcap must enhance its range of over 800 instruments to rival top competitors like Blackbull Markets, which offers 26,000+ assets, especially improving its limited commodities selection.
- The demo account is available for 30 days, after which it requires a request for extension. This is less convenient than XM's offering, which provides an unlimited demo mode.
71.28% of retail traders lose money when trading CFDs
Investing In Commodity CFDs Explained
CFD commodity trading allows investors to speculate on assets that they may not otherwise have access to, such as gold, silver, oil or natural gas. CFD stands for ‘Contract for Difference.’ It is a financial product that pays the difference between the opening price (at the time of purchase) and the closing price (at the time the contract is sold).
When purchasing CFDs, traders have the potential to go long and profit from a rise in the underlying commodities’ value, or go short and earn money if the value drops. As a derivative product, the investor does not own the underlying commodity. As such, they do not have to worry about taking on delivery and storing barrels of oil, for example.
Trade Example
The best way to understand CFD commodity trading is to look at an example. Imagine that an investor believes the price of UK Brent oil, which is currently trading at a sell/buy price of £85.99/86.00, is going to rise. They purchase 100 units, for which the broker offers a 5% margin rate, meaning the trader must put down a deposit margin of £430 (5% x (100 units x £86.00)).
It should be noted that this does not mean that losses are limited to £430, this is simply the amount of money that must be in the trader’s account to authorise the trade.
After a couple of hours have passed, UK Brent is now trading at a sell/buy price of £87.50/87.51. At this point, the trader decides to close their position. The gross profit is then calculated from the difference between the price when the CFD was purchased and the price when it was sold. In this case, there is a movement of £1.50 (£87.50 – £86.00). This is then multiplied by the number of units (100) to give a total gross profit of £150.00.
Most brokers offering CFD commodity trading will charge a commission on top of each trade. This is typically around 0.1% and applies to both buying and selling the contract. Therefore, in this case, the investor will pay £8.60 (100 units x 86.00 original buying price x 0.1%) and £8.75 (100 units x 87.50 selling price x 0.1%) in commission for each action, giving a total of £17.35. Therefore, the net profit for this CFD trade is £132.65.
Types Of Commodities
Traders can invest in CFDs relating to many different goods and resources. The most popular commodities for CFD trading can be split into three distinct categories:
Precious Metals
Metals have historically been the most popular commodity to trade. Investors can purchase CFDs relating to the value of gold, silver, platinum, aluminium, zinc, and copper, among others. Their popularity stems from their history as a store of value for some of the world’s best-known currencies. While most nations have moved away from the gold standard, metals continue to hold their value and provide exciting investment opportunities to traders, especially during periods of inflation and economic downturn.
The London Metal Exchange (LME) is well-known for providing trading access to a range of metals. Investors interested in gold CFD trading can also head to a broker such as XTB to get started.
You should always do your market research and follow a solid strategy when trading gold CFDs. Also, be sure to check the hours that trading is permitted by your chosen broker. The current price of gold in various countries can be found on TradingView.
Agriculture
Agricultural commodities are perfect for traders who are seeking to add a little more risk to their CFD trading portfolio. This asset group includes natural resources and foods such as coffee, orange juice, sugar, wheat, corn, and livestock.
These assets tend to be more volatile than metals. The price of an agricultural commodity can be affected by a host of external factors, including poor weather and natural disasters. They can present a good opportunity to turn a profit, however traders should ensure to implement risk management strategies to protect themselves against large losses.
Energy
Energy commodities cover a broad range of resources. These can include fossil fuels such as UK Brent Oil, petrol and natural gas, as well as renewable energy sources at green-focused exchanges.
Like their agricultural counterparts, energy commodities tend to be quite volatile. As seen with the Covid-19 pandemic and the crisis in Ukraine, oil and energy prices can fall and rise very quickly due to changes in supply and demand.
Spot VS Futures CFDs
Commodity CFD trading can be conducted in two ways: Spot and futures CFDs. Spot trading involves the contract being bought and sold at the current market price of the asset. The trade is opened and closed immediately or “on the spot”. This is the simplest form of commodity CFD trading for UK-based investors. Traders can monitor the live price of any commodity over a set period, and buy or sell at set entry and exit points.
On the other hand, futures CFD trading involves entering an agreement with a broker to purchase an asset such as rice or silver at a pre-specified price in the future. This allows traders to potentially benefit by locking in a better price than they would receive in the spot trading market.
Other than the price used, there are some differences between spot and futures markets at CFD brokers. Spot trading typically features lower spreads than futures trading. However, overnight charges will be incurred when positions are held longer in spot CFD markets. Futures markets do not tend to charge for swaps or rollovers.
The other difference is that spot CFDs do not typically expire, so they can be held for as long as the trader wants. On the other hand, futures commodity CFDs have a set expiry time and date.
Benefits Of CFD Commodities Trading
- Do not have to own and store hard or soft commodities, such as gold
- A small margin is required to purchase contracts
- Easy to implement risk management tools
- Traders can go long or short
Drawbacks Of CFD Commodities Trading
- While leverage can increase winnings, it also increases losses
- Spreads and commissions can negatively affect profits
Getting Started Trading Commodity CFDs
If you want to start CFD commodity trading, follow this step-by-step guide:
- Choose a broker: The first and most important step is to choose an online broker that offers CFD commodity trading. Alongside ensuring they offer commodities, traders should also consider the various fees and commissions they will be charged to trade. This can include researching typical spreads, as well as overnight fees and any other charges that the broker may have. Next, those who wish to make use of leverage should look at the margin rates offered by different brokers. Finally, try to ensure your chosen broker has a good reputation and offers high levels of customer support, including 24/5 coverage if possible.
- Select an asset: With a broker selected, you need to choose which assets you want to invest in, from metals like gold and silver to agricultural products such as coffee and rice. First-timers may want to opt for more stable commodities like gold, silver and platinum which tend to be less volatile. Those with more experience could turn to higher-risk commodities such as corn and oil which have prices that fluctuate more often.
- Pick the direction of trade: Decide which way you think the price of the asset will move. If you believe it is going to rise in value, go long. If you think it will drop, go short and buy a selling CFD.
- Choose the number of units: Select the number of units that you wish to purchase. When trading with leverage, more units will mean a larger deposit is required. It could also mean that your losses will be amplified, so always exercise caution.
- Use risk management tools: These tools are the key to ensuring that you trade safely. Add a stop loss mechanism to make sure that you cannot lose a substantial amount. Also, consider implementing a take profit order to bank profits if the price of your chosen commodity rises suddenly.
- Monitor and close: Once the trade is placed, sit and monitor. Check the live prices regularly and keep an eye on your account in case of a sudden change in value. Once you are satisfied with the growth of a CFD, close the trade and take your profit.
Bottom Line On Trading CFD Commodities
CFD commodity trading allows a much wider base of investors to get involved in an exciting and profitable market. Retail traders can speculate on price movements without owning underlying assets like rice and corn, and they can trade with leverage to potentially increase returns. The variety of commodity assets ensures there is something for everyone with a low-or high-risk appetite.
If you want to start CFD commodity trading today, check out our list of the best UK brokers.
FAQs
What Is A Commodity CFD?
A Contract for Difference (CFD) is a financial product in which the profit or loss is calculated from the difference between the price of an asset at purchase and the price at the time the contract is closed. They are derivative products in which the trader does not own the underlying commodity, such as gold, silver, oil or natural gas.
Which Are The Best Commodities To Trade CFDs With?
There is no simple answer as to which commodities are best for CFD trading. More cautious traders may prefer precious metals like gold and silver, whereas those with an appetite for risk may prefer oil and corn.
What Does It Mean To Go Long In CFD Commodity Trading?
If you go long, you are buying the contract. This is done when you believe the price of the asset, such as gold, will rise. The other option is to go short or sell the contract. In this case, you want the value of the commodity to drop.
Is CFD Commodity Trading Allowed In The UK?
Yes, CFD commodity trading is permitted in the UK. Many FCA-regulated brokers offer the derivative product to retail customers. Leverage is usually capped at 1:30 in line with regulations.
What Is Margin Trading In Commodity CFDs?
Many brokerages allow CFD commodity traders to borrow money from the broker, also known as leverage or margin. Essentially, the trading platform will offer a set rate of leverage (such as 1:30) for which the trader will put down a deposit of £1 for every £30 being traded. This can increase profits, but it can also lead to higher losses.