Commodities are most often used as raw materials in the production of other goods or services and the price of the commodity is subject to supply and demand. Commodities include agricultural products, fuels, and metals and can be traded on a commodity exchange or spot market.
Like any investment, the aim in commodities trading is to buy low and sell high. The difference with commodities is that they are highly leveraged and trade in contract sizes instead of shares.
The four categories of trading commodities include:
- Energy (crude oil, heating oil, natural gas and gasoline)
- Metals (gold, silver, platinum and copper)
- Livestock and Meat (lean hogs, pork bellies, live cattle and feeder cattle)
- Agricultural (corn, soybeans, wheat, rice, cocoa, coffee, cotton and sugar)
To start trading exchange-traded products, you have to open a trading account with a commodity licensed broker like ActivTrades where you can quickly access global markets and trade a full range of commodities, with competitive spreads.
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