Cotton
Cotton trading can be used to bet on global stockpiling, hedge against inflation, and speculate on oil prices. Its widespread application in the textile industry makes it a popular soft commodity with online traders. This manual unpacks key manufacturing countries and companies, strategy considerations, market economics, and cotton trading vehicles. Our experts have also reviewed and ranked the top cotton brokers:
Best Cotton Brokers UK
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Founded in Australia in 2010, Pepperstone is a highly regarded broker specialising in forex and CFDs. Serving more than 400,000 clients globally, it provides access to over 1,300 financial instruments through popular platforms like MT4, MT5, cTrader, and TradingView. Its fee structure is both low and transparent. With regulation by reputable bodies such as the FCA, ASIC, and CySEC, Pepperstone guarantees a safe trading environment for traders at every level.
Instruments Regulator Platforms CFDs, Forex, Currency Indices, Stocks, Indices, Commodities, ETFs, Crypto (only Pro clients), Spread Betting FCA, ASIC, CySEC, DFSA, CMA, BaFin, SCB MT4, MT5, cTrader, TradingView, AutoChartist, DupliTrade, Quantower Min. Deposit Min. Trade Leverage $0 0.01 Lots 1:30 (Retail), 1:500 (Pro) -
Established in Poland in 2002, XTB caters to over a million clients worldwide. This forex and CFD broker offers a robust regulatory framework, a diverse range of assets, and prioritises trader satisfaction. It provides an intuitive proprietary platform equipped with excellent tools to support aspiring traders.
Instruments Regulator Platforms CFDs on shares, Indices, ETFs, Raw Materials, Forex currencies, cryptocurrencies, Real shares, Real ETFs FCA, CySEC, KNF, DFSA, FSC xStation Min. Deposit Min. Trade Leverage $0 0.01 Lots 1:30 -
IC Trading belongs to the reputable IC Markets group. Designed for dedicated traders, it offers highly competitive spreads, dependable order execution, and sophisticated trading tools. However, it operates from Mauritius, an offshore financial centre, allowing high leverage but within a less regulated environment.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, Bonds, Cryptos, Futures FSC MT4, MT5, cTrader, AutoChartist, TradingCentral Min. Deposit Min. Trade Leverage $200 0.01 Lots 1:500 -
Fusion Markets, an online broker since 2017, operates under the regulation of ASIC, VFSC, and FSA. Renowned for offering cost-effective forex and CFD trading, it provides various account options and copy trading solutions to suit diverse trading needs. New clients can begin trading with a simple three-step registration process.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, Crypto ASIC, VFSC, FSA MT4, MT5, cTrader, TradingView, DupliTrade Min. Deposit Min. Trade Leverage $0 0.01 Lots 1:500 -
eToro, a leading multi-asset platform, provides access to trading services across thousands of CFDs, stocks, and cryptocurrencies. Established in 2007, it boasts millions of active traders worldwide and is sanctioned by top-tier regulators such as the FCA and CySEC. It stands out for its extensive social trading feature. Crypto investments are unstable and carry risk. Tax implications might apply. Acknowledge the risks involved. 61% of retail CFD accounts incur losses.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, ETFs, Smart Portfolios, Commodities, Futures, Crypto, NFTs FCA, ASIC, CySEC, FSA, FSRA, MFSA, CNMV, AMF eToro Web, CopyTrader, TradingCentral Min. Deposit Min. Trade Leverage $50 $10 1:30 -
Established in 2009, Vantage provides trading on more than 1,000 short-term CFD products to over 900,000 clients. Forex CFDs are available from 0.0 pips on the RAW account via TradingView, MT4, or MT5. Regulated by ASIC, Vantage ensures that client funds are kept in separate accounts. Traders looking to copy strategies will benefit from a wide array of social trading tools.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, ETFs, Bonds, Spread betting FCA, ASIC, FSCA, VFSC ProTrader, MT4, MT5, TradingView, DupliTrade Min. Deposit Min. Trade Leverage $50 0.01 Lots 1:30 -
Founded in 2008 and based in Israel, Plus500 is a leading brokerage with over 25 million registered traders across more than 50 countries. It focuses on CFD trading, offering a user-friendly proprietary platform and mobile app. The company provides competitive spreads and does not impose commissions or charges for deposits or withdrawals. Plus500 stands out as a highly trusted broker, licensed by respected authorities such as the FCA, ASIC, and CySEC.
Instruments Regulator Platforms CFDs on Forex, Stocks, Indices, Commodities, ETFs, Options FCA, ASIC, CySEC, DFSA, MAS, FSA, FSCA, FMA, EFSA WebTrader, App Min. Deposit Min. Trade Leverage $100 Variable 1:30
Pepperstone
XTB
IC Trading
Fusion Markets
eToro
Vantage FX
Plus500Safety Comparison
Compare how safe the Cotton are and what features they offer to protect traders.
| Broker | Trust Rating | FCA Regulated | Negative Balance Protection | Guaranteed Stop Loss | Segregated Accounts |
|---|---|---|---|---|---|
| Pepperstone | ✔ | ✔ | ✘ | ✔ | |
| XTB | ✔ | ✔ | ✔ | ✔ | |
| IC Trading | ✘ | ✘ | ✘ | ✔ | |
| Fusion Markets | ✘ | ✔ | ✘ | ✔ | |
| eToro | ✔ | ✔ | ✘ | ✔ | |
| Vantage FX | ✔ | ✔ | ✘ | ✔ | |
| Plus500 | ✔ | ✔ | ✔ | ✔ |
Payments Comparison
Compare which popular payment methods the Cotton support and whether they have trading accounts denominated in British Pounds (GBP).
| Broker | GBP Account | Debit Card | Credit Card | Neteller | Skrill | Apple Pay |
|---|---|---|---|---|---|---|
| Pepperstone | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ |
| XTB | ✔ | ✔ | ✔ | ✔ | ✔ | ✘ |
| IC Trading | ✔ | ✔ | ✔ | ✔ | ✘ | ✘ |
| Fusion Markets | ✔ | ✔ | ✔ | ✔ | ✔ | ✘ |
| eToro | ✔ | ✔ | ✘ | ✔ | ✔ | ✘ |
| Vantage FX | ✔ | ✔ | ✔ | ✔ | ✔ | ✘ |
| Plus500 | ✔ | ✔ | ✔ | ✘ | ✔ | ✔ |
Mobile Trading Comparison
How good are the Cotton at mobile trading using apps or other mobile interfaces.
| Broker | Mobile Apps | iOS Rating | Android Rating | Smart Watch App |
|---|---|---|---|---|
| Pepperstone | iOS & Android | ✘ | ||
| XTB | iOS & Android | ✔ | ||
| IC Trading | iOS & Android | ✘ | ||
| Fusion Markets | iOS & Android | ✘ | ||
| eToro | iOS & Android | ✘ | ||
| Vantage FX | iOS & Android | ✘ | ||
| Plus500 | iOS, Android & Windows | ✘ |
Beginners Comparison
Are the Cotton 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 |
|---|---|---|---|---|---|
| Pepperstone | ✔ | $0 | 0.01 Lots | ||
| XTB | ✔ | $0 | 0.01 Lots | ||
| IC Trading | ✔ | $200 | 0.01 Lots | ||
| Fusion Markets | ✔ | $0 | 0.01 Lots | ||
| eToro | ✔ | $50 | $10 | ||
| Vantage FX | ✔ | $50 | 0.01 Lots | ||
| Plus500 | ✔ | $100 | Variable |
Advanced Trading Comparison
Do the Cotton offer features that allow for more advanced trading strategies?
| Broker | Automated Trading | Pro Account | Leverage | VPS | AI | Low Latency | Extended Hours |
|---|---|---|---|---|---|---|---|
| Pepperstone | Expert Advisors (EAs) on MetaTrader | ✔ | 1:30 (Retail), 1:500 (Pro) | ✔ | ✘ | ✔ | ✘ |
| XTB | - | ✔ | 1:30 | ✘ | ✘ | ✔ | ✘ |
| IC Trading | Expert Advisors (EAs) on MetaTrader, cBots on cTrader | ✘ | 1:500 | ✔ | ✘ | ✔ | ✘ |
| Fusion Markets | Expert Advisors (EAs) on MetaTrader, cBots on cTrader | ✘ | 1:500 | ✔ | ✘ | ✔ | ✘ |
| eToro | Automate your trades via CopyTrader - follow profitable traders. Open and close trades automatically when they do. | ✘ | 1:30 | ✘ | ✔ | ✘ | ✔ |
| Vantage FX | Myfxbook AutoTrade, Expert Advisors (EAs) on MetaTrader | ✘ | 1:30 | ✔ | ✘ | ✘ | ✘ |
| Plus500 | ✘ | ✘ | 1:30 | ✘ | ✔ | ✘ | ✘ |
Detailed Rating Comparison
Use this heatmap to compare our detailed ratings for all of the Cotton.
| Broker | Trust | Platforms | Mobile | Assets | Fees | Accounts | Support | Research | Education |
|---|---|---|---|---|---|---|---|---|---|
| Pepperstone | |||||||||
| XTB | |||||||||
| IC Trading | |||||||||
| Fusion Markets | |||||||||
| eToro | |||||||||
| Vantage FX | |||||||||
| Plus500 |
Our Take On Pepperstone
"Pepperstone is a premier trading platform, providing tight spreads, swift execution, and sophisticated charting tools for seasoned traders. Beginners benefit from no minimum deposit, comprehensive learning materials, and outstanding 24/7 support."
Tobias Robinson
Reviewer
Pros
- Pepperstone offers rapid execution speeds of approximately 30ms, enabling swift order processing and execution, making it ideal for traders.
- Over the years, Pepperstone has consistently garnered recognition from DayTrading.com’s annual awards. Recently, it was honoured as the 'Best Overall Broker' in 2025 and was the 'Best Forex Broker' runner-up the same year.
- Pepperstone now offers spread betting via TradingView, delivering a streamlined and tax-efficient trading experience with sophisticated analytical tools.
Cons
- Pepperstone doesn't offer cTrader Copy, a favoured feature for copying trades found in the cTrader platform, which is available on other platforms such as IC Markets. However, Pepperstone has launched its own user-friendly copy trading app.
- Pepperstone's demo accounts expire after 30 days, which may not provide sufficient time to explore various platforms and evaluate trading strategies.
- Although its market range has improved, its crypto offerings remain limited compared to brokers specialising in this sector, lacking real coin investment options.
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."
Pros
- 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 processes withdrawals swiftly, paying within 3 business days, subject to the method and amount.
- XTB has increased interest rates on idle funds and introduced zero-fee ISAs for UK clients, offering a wide variety of markets.
Cons
- XTB has stopped supporting MT4, restricting traders to its own platform, xStation. This decision may discourage experienced traders accustomed to using the MetaTrader suite.
- 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.
- The research tools at XTB are commendable but have the potential to excel further. Enhancing them with access to top-tier third-party services like Autochartist, Trading Central, and TipRanks would significantly elevate their offering.
Our Take On IC Trading
"IC Trading offers an ideal environment, featuring top-tier execution speeds of around 40 milliseconds, extensive liquidity, and advanced charting tools, perfect for scalpers, traders, and algorithmic traders."
Christian Harris
Reviewer
Pros
- IC Trading offers top-tier spreads, with some major currency pairs like EUR/USD featuring spreads as low as 0.0 pips, making it an excellent choice for traders.
- The streamlined digital account setup allows traders to commence trading swiftly, eliminating lengthy paperwork. Testing shows the process takes mere minutes.
- IC Trading provides exceptional flexibility, allowing traders to open as many as 10 live accounts and 20 demo accounts. This enables the management of distinct profiles for various activities, including manual and algorithmic trading.
Cons
- Although IC Trading operates under the reputable IC Markets group, it is licensed by the FSC in Mauritius, a regulator known for its limited financial transparency and lack of robust safeguards.
- Unlike IC Markets, IC Trading lacks support for social trading via the IC Social app or the ZuluTrade platform.
- The educational materials require significant enhancement unless accessed via the IC Markets website. This limitation is particularly disadvantageous for beginners seeking a thorough learning experience, especially when compared to industry leaders such as eToro.
Our Take On Fusion Markets
"Fusion Markets offers forex traders competitive pricing with minimal spreads, low commissions, and new TradingView integration. It is an excellent choice, especially for Australian traders, given its base and regulation by ASIC."
Pros
- The market analysis tools, Market Buzz and Analyst Views, are excellent for identifying opportunities and are seamlessly incorporated into the client dashboard.
- Fusion Markets provides algo traders with a sponsored VPS and offers a 25% discount for choosing the NYC Servers VPS for MT4 or cTrader.
- The selection of charting platforms and social trading features is outstanding. Options like MT4, MT5, cTrader, and the newer TradingView meet diverse trader preferences.
Cons
- The demo account, lasting only 30 days, is limited in its effectiveness as a trading tool when used with a live account.
- Unlike AvaTrade, there is no specialised trading platform or app tailored for beginners, which is a significant disadvantage.
- The broker stands out with its extensive selection of currency pairs, surpassing most competitors. However, its alternative investment options are merely average, lacking stock CFDs outside the US.
Our Take On eToro
"eToro's social trading platform excels with its outstanding user experience and lively community chat, aiding beginners in spotting opportunities. It offers competitive fees on numerous CFDs and real stocks, alongside exceptional rewards for seasoned strategists."
Pros
- eToro has enhanced its investment portfolio by frequently introducing new crypto assets. It currently offers a selection of over 100 digital currencies.
- Diverse investment portfolios are accessible, encompassing traditional markets, technology, cryptocurrency, and beyond for traders.
- The trading app provides a top-tier social environment featuring an engaging feed and community chat, which we enjoy using.
Cons
- The absence of extra charting platforms such as MT4 may deter experienced traders who rely on external software.
- The minimum withdrawal is set at $30, accompanied by a $5 fee. This may impact traders with limited funds, particularly those just starting out.
- There are no assured stop-loss orders, which could be a valuable risk management tool for novice traders.
Our Take On Vantage FX
"Vantage is an ideal choice for CFD traders looking for a well-regulated broker with access to the dependable MetaTrader platforms. With a swift sign-up process and a minimum deposit of $50, starting trading is simple and fast."
Pros
- Vantage upholds a high trust score through its solid reputation, backed by premier regulation from the FCA and ASIC.
- The broker recently expanded its range of CFDs, offering more trading opportunities.
- Hedging and scalping strategies are fully permitted without any short-term restrictions.
Cons
- It's unfortunate that some clients must register with the offshore firm, which provides reduced regulatory safeguards.
- Based on tests, average execution speeds of 100ms to 250ms are slower compared to other options.
- To access optimal trading conditions, a substantial deposit of $10,000 is required. This includes a commission of $1.50 per transaction per side.
Our Take On Plus500
"Plus500 provides a seamless experience for traders with its CFD platform, featuring a sleek design and interactive charting. However, its research tools are basic, fees are higher than the most economical brokers, and its educational resources could be improved."
Pros
- Plus500 has expanded its range of short-term trading instruments by adding VIX options, which feature increased volatility. Additionally, it has extended trading hours for seven stock CFDs.
- The customer support team consistently delivers reliable support around the clock through email, live chat, and WhatsApp.
- The broker provides low-commission trading across varied markets, reducing extra fees and attracting seasoned traders.
Cons
- Compared to competitors like IG, Plus500 offers limited research and analysis tools.
- Algorithmic trading and scalping are not available, potentially deterring certain traders.
- Educational resources are not as extensive as leading brokers such as eToro, which affects beginners' ability to learn quickly.
Cotton Trading Basics
Cotton is primarily used in the textile industry to make clothing, bedding, and curtains. Its application also extends to a variety of other items, including tents, book binds, bank notes, and even gear for astronauts.
The price of cotton can fluctuate for a variety of reasons, including government subsidies, an increase or decrease in the production of competing materials, plus sales of stockpiles by key suppliers like India and China.
The Intercontinental Exchange (ICE) plays an important role in trading futures and options in the soft commodity. Futures are standardised agreements to buy or sell an asset at a predetermined price and date in the future. ICE cotton futures are a key benchmark for the global cotton industry.
Traders can speculate on the price of the cotton through a variety of vehicles, from futures and options to CFDs and stocks in companies involved in the cotton industry.
History
Cotton trading dates back centuries and was one of the first commodities traded on a global scale. Initially, it was mainly produced in India and exported to Europe. The market was dominated by British companies, who played a significant role in shaping the global cotton trade.
By the mid-1800s, the United States had surpassed India as the world’s largest cotton producer, and cotton trading had become a global industry.
Between 2000 and 2010, world cotton production increased from 89 million bales to 117 million bales, a 32% increase. During this time, China emerged as the largest consumer of cotton, consuming over 50% of the world’s supply. Additionally, the use of technology in cotton trading increased, with electronic trading platforms such as ICE becoming popular.
Post-2000s, cotton trading continues to be a vital part of the global economy. Cotton is still one of the world’s most important cash crops, with an estimated 20 million people involved in its production.
The market is highly competitive, with companies from around the world involved in cotton trading. Technological advancements have further increased the efficiency of cotton production and investment, with the use of blockchain technology and artificial intelligence becoming more prevalent.
Cotton is still mainly produced in countries with weather that accommodates cotton crops, such as India or Pakistan, however it is traded globally including in the UK.
Price Chart
Factors That Influence The Price Of Cotton
- International demand and supply: The global supply and demand of cotton is a major factor in its price, and fluctuations in demand from major importers such as China play a key role.
- Economic indicators: Inflation rates, exchange rates, and interest rates can impact the price of cotton. If the value of the dollar rises against other currencies, this can lead to a decrease in the price of cotton as it becomes more expensive for foreign buyers.
- Weather patterns: If weather conditions are unfavourable for cotton crops, such as droughts or heavy rains, this can limit the supply of cotton and increase its price.
- Government policies: Trade agreements and subsidies can influence the price of cotton. If a government provides subsidies to cotton producers, this can increase supply and lower prices.
- Technology: Technological advances in cotton production can impact the price of cotton. If new technology makes it easier and more cost-effective to produce cotton, this can increase the supply and lower prices.
- Production costs: If companies face pressure from high production costs, this can limit the supply of cotton and increase its price.
Benefits Of Trading Cotton
- Cotton is volatile which opens up opportunities for profit
- It can be used to speculate on rising oil prices due to a high correlation
- Similar to other commodities, it can be used as a hedging tool against inflation
- Cotton trading is available through various vehicles, including leveraged CFDs, futures and options
Risks Of Trading Cotton
- High volatility also increases the chance of large losses
- Cotton is heavily influenced by weather conditions which can be hard to predict
- Cotton is primarily traded by large firms and institutions so the choice of retail brokers is limited
How To Trade Cotton In The UK
There are several ways for UK traders to participate in the cotton trading market:
- Stocks: Buying and selling shares of companies in the cotton industry, either through the production or sale of related items like clothes, is another way to bet on cotton prices. Importantly, share dealing is a more indirect way to speculate on the price of cotton. Popular cotton stocks include Deere & Company and FMC Corporation.
- ETFs: Cotton ETFs provide exposure to the soft commodity, alongside other assets, such as agricultural commodities. They are essentially a group of assets traded on an exchange, reducing risk through diversification. Popular cotton ETFs include the iPath Series B Bloomberg Cotton Subindex Total Return ETN.
- CFDs: A popular choice among UK retail traders who want to speculate on cotton prices without taking ownership of the physical commodity. By using CFDs, traders can open positions that bet on the future direction of cotton prices. With the use of leverage, traders can also amplify their potential profits or losses. CFDs do not have a fixed expiration date, so traders can hold their positions for as long as they want, though they are typically used for short-term trading strategies.
- Futures: Cotton futures are contracts that allow traders to buy or sell cotton at a predetermined price and date in the future. These contracts are primarily traded on commodity exchanges such as the Intercontinental Exchange (ICE). Futures contracts are commonly used for hedging, a risk management strategy that allows traders to protect themselves from price fluctuations in the cotton market. They can also be used for speculative purposes.
- Options: Cotton options are contracts that give the holder the right, but not the obligation, to buy or sell a specific amount of cotton at a predetermined price and time in the future. They provide traders with the flexibility to limit their potential losses to the premium paid for the option.
Comparing Cotton Trading Brokers
- Fees: Compare the fees charged, including spreads, commissions, and any payment fees. Pepperstone, for example, offers cotton CFDs with a 0.16 minimum spread, 1:50 leverage, and a contract size of 10,000 lbs.
- Trading platform: Look for cotton brokers with a user-friendly trading platform that has advanced charting tools and technical indicators. Make sure the platform is stable and fast, and that it can be accessed on different devices, such as your mobile phone via an app. MT4, MT5 and TradingView are popular picks.
- Range of assets: Check the range of cotton contracts and other commodities offered by the broker, as well as other markets such as stocks and forex. This will allow traders to build a diverse portfolio. XTB, for instance, offers 28 commodities (including cotton), plus thousands of stocks CFDs, indices, ETFs, forex, and cryptos.
- Demo account: Beginners should check if the broker provides a demo account or virtual trading environment. This allows traders to practice trading cotton without risking real money. Also, look for educational materials such as webinars, video tutorials, and eBooks.
- UK regulation: Verify that the brokerage is regulated by a reputable authority, such as the FCA. Also ensure that the broker has a strong track record and positive reviews from other traders. Also check for contact number details in case of any issues.
- Additional tools: The best cotton brokers offer expert insights and data into the soft commodity. They will also provide an economic calendar with upcoming events and news that could impact cotton prices.
Cotton Trading Hours
Investors can trade cotton futures on multiple exchanges, such as the Singapore Exchange (SGX), however, the Intercontinental Exchange (ICE) is typically the exchange of choice for UK traders. The trading hours of the ICE for cotton traders are:
- Sunday to Friday: 8:00 PM to 7:00 PM GMT
- Last trading day of the month: 8:00 PM to 3:00 PM GMT on the next day
Bottom Line On Cotton Trading
Cotton trading provides exposure to a volatile soft commodity with widespread applications, including in textiles, homeware and industrials. It can be used to hedge against inflation, speculate on oil prices, and profit from supply and demand imbalances caused by the sale of global stockpiles, for example. Our list of leading cotton brokers offers trading through multiple vehicles, such as CFDs, ETFs, futures, and options.
FAQ
Do I Need To Be Able To Store Cotton If I Want To Trade It?
No, you can trade derivatives of cotton, such as contracts for difference, or CFDs. This means you are not an owner of the cotton so do not have to store it. Instead, you just speculate on whether the price of the commodity will rise or fall.
Can I Trade Cotton On Exchanges Other Than ICE Futures Europe?
Yes, UK residents can also trade cotton futures on other exchanges such as the New York Mercantile Exchange (NYMEX) and the Intercontinental Exchange (ICE) US. With that said, exchange availability varies between cotton brokers.
What Leverage Is Available On Cotton Trading Products?
Leverage levels depend on the broker and regulator. FCA-regulated brokers, for example, typically offer leverage between 1:10 and 1:50 on cotton CFDs. This includes big names like Pepperstone. Note, professional traders may be able to trade with leverage up to 1:200.
What Are The Best Cotton Trading Strategies?
Popular cotton trading strategies include trend following, swing trading, and breakout trading. Trend following entails identifying and trading in the same direction as a trend in the price of cotton. Swing trading is about taking advantage of short-term price swings, while breakout trading involves trading on the price movements that occur when the price breaks out of a key level of support or resistance.
Article Sources
Cotton outlook across prices, production, consumption and trade