Both advanced and new participants in the financial markets often think that the possibility to trade commodities online is the most relevant alternative to capital market investments. You deal with these tradable instruments differently than with assets from the stock market. Unlike shares and equity products, deals on raw materials are made via futures or options contracts. Plus, the costs of products might depend on a bigger number of various things.
As in any other case, commodity market trading has its advantages and disadvantages. Consider that with DotBig, you’ll have the possibility to profit from these assets with the help of the tips of our professional analysts. This increases your chances of success.
In the abstracts below, we'll try to describe how to speculate on raw materials prices successfully and how our broker can help you.
Basics of commodities trading
Commodities are defined as raw materials that might also be bought physically. For example, you can trade oil forex or precious metals. These products are always demanded because they are necessary for many industries for manufacturing. This demand, as a rule, remains at a stable level. The price rates of commodities don’t differ in different states because they are traded on the same market. Specific reasons in a certain country, including shipping issues or tax policy, impact the rates of a certain product in your country, but the contract from the market average shouldn’t be very significant. Trading commodities on DotBig is profitable even if you are a complete newbie.
Our analysts suggest that the best way to invest in these assets is to invest in commodity CFDs. Our online broker enables you to do this. If you choose such a strategy, you won’t buy and hold goods, but you will rather try to benefit from changing buying and selling prices. Keep reading to understand what are the basic principles of CFD commodities trading and how this actually works.
How does CFD commodities trading work?
CFDs are instruments you use to benefit from the margin. In a nutshell, traders don't need to pay the entire value of a deal. Commodity CFD trading allows you to involve smaller capitals in trades than you would do when dealing with futures. Plus, there is a possibility to make benefits from both increasing and decreasing prices.
For example, you wish to benefit from the falling oil market. In such cases, we recommend opening a short position. This will mean that you will be able to benefit from the difference between the selling and buying-back prices. Although trading CFDs is risky, it's easy and profitable if you do it wisely.
How to trade commodities online?
This activity suits beginners because it’s not very difficult to monitor the events that might impact their prices, as many commodities are goods that are always highly demanded. To start trading commodities online, you should open a live trading account on DotBig and trade via our web-based platform.
To do this, fill in the registration form and complete the verification. Then, select your market. You can trade oil, natural gas, precious metals, and so on. Just keep in mind and never neglect the opportunity to learn something useful from our professional analysts. Under their guidance, it will be much easier to compile a well-diversified portfolio and manage your fund more efficiently.
Although the risks are low, when trading goods online, you have to be aware of them. Examine not only the potential benefits but the disadvantages of this market as well.
Pros
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When trading commodities, you can diversify your investments. As you know, diversification is one of the ways to mitigate the risks of capital losses. You can diversify your portfolio with very different commodity instruments.
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Inflation is good for commodity online trading. Inflation increases the price of raw materials and this is good for you if you trade online and hold some assets.
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You can sell commodities online any time you want or need. This makes these assets 100% liquid.
Cons
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When trading commodities online, you face higher leverage. It’s difficult to control it when you are a beginner. That’s why follow the recommendation of DotBig analysts.
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Commodities are very exposed to geopolitical events and economic factors. Crises make these assets very volatile.
Your access to global markets - DotBig
DotBig is where you can trade commodities online with minimum skills, experience, and knowledge of the financial markets. Explore our selection of raw goods, and choose which one will work better for you.
If this selection seems not enough, explore other financial markets as well. Except for commodities, DotBig provides the possibility to make profits from forex, stock trading, cryptocurrencies, etc. Join us!
