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Most novice investors skip commodities as they are not as commonly used as foreign currency, coins, or stocks. But, when a trader needs to diversify his portfolio, this asset is a number-one choice. Hence, we believe that our top list of brokers offering it will come in handy for you.
To start with, let us explain which assets are called commodities. There are two basic groups. Soft ones are products related to agriculture and livestock. These are pork, fruits, corn, sugar, and so on. On the other hand, hard ones unite diversified underground and natural resources, like gold, silver, gas, rubber, etc. Due to the fact that the market of such products is highly volatile, one can make good money on their price fluctuations.
The most common choices among commodity traders are futures, CFDs, and ETFs. In the first case, traders agree to sell or buy a certain type of product at a fixed price at a specified point in the future. In the second case, one earns from a difference between an entry price and a price, at which a contract is closed, and can terminate the deal if there is a need. And, as for ETFs, these are ready portfolios (sets) of stocks or bonds, which can be traded like usual shares and allow tracking the value of the corresponding commodities.
Certainly, like with any other kind of asset, in the case of commodity trading, one’s profit depends largely on the choice of a brokerage company. A commodities broker determines which products and tools you will have access to, which commissions and fees you will have to pay, the security of your money, the speed of trade execution, and other aspects of your trading routine.
How to choose the best service? Pay attention to the following details:
- licensing in your country;
- a range of available commodities and other assets;
- trading and non-trading commissions, including leverage, spreads, deposit and withdrawal fees, maintenance charges;
- a selection of charting and analysis instruments;
- convenience of use
- availability of technical support;
- other traders’ feedback;
- an overall reputation;
- availability of a demo account for testing the service.
To protect you from scammers and help you get the biggest profit from commodities, we compiled our own top list of brokers for you: commodity futures and ETFs ― eOption, Interactive Brokers, Fidelity Investments, E*Trade, Charles Schwab, TD Ameritrade; CFDs ― XM Broker, eToro, Exness, IG Markets, Forex.com.
In sum, commodities are an advantageous choice for those who want to diversify their portfolios as they are characterized by cheap trading commissions, low margins, and high liquidity. So, we recommend you register with one of the brokers from our list and give this asset a try.
