What are commodities?
Commodities are hard assets, basic goods or raw materials that can be grown, extracted, or mined and can be bought or sold. Commodities are most often used as inputs in the production of other goods or services. For traders, they are important securities that can diversify their portfolios. Commodities trading determines the prices of all commodities. As a result, the prices of the most important items you use every day are volatile. In some cases, like gasoline, they change from day to day.
Which Commodities can be traded?
Commodities that are traded are typically sorted into four categories: metal, energy, livestock and meat, and agricultural.
Examples of traditional commodities include gold, oil, wheat, sugar, grains, coffee, and even natural gas.
What is the Advantage of trading Commodities?
There are many benefits and advantages of trading commodities, and one of them is that commodity markets work on the principle of demand and supply, any rapid increase in demand will have a direct impact on price, providing an opportunity to generate higher profits in a limited amount of time.
Diversification of your portfolio protects you against sudden lows and helps to keep your investment portfolio stable. Commodity market is the most preferred source of diversification from your investments in stocks and bonds by hedging. Investment in commodities as a hedge instrument helps you manage your risk in the markets.
Inflation can be very harmful for regular traders because during the inflation period, there can be a drop in your income from stocks and bond investments, but commodities are usually positive during inflation.
Why trade Commodities with Finveo?
There are many reasons why you should choose Finveo as your platform of choice to start trading commodities. Here are just a few:
- Over 60 financial assets
- Up to 100 x leverage.
- Institutional grade liquidity.
- Lowest transparent fees.
- Finveo offers some of the most competitive spreads.
- 24/7 multilingual customer service.
- Earn daily and monthly rewards.