What is commodity trading?

Commodities - what are they?

What is a commodity and what is commodity trading? According to the Cambridge English dictionary, a commodity is ‘a substance or product that can be traded, bought or sold’. Commodity trading, through a broker, involves speculating in price movements on products such as gold and oil.

The stages and traders within the market

There are different stages and traders within the commodities market. Firstly, the producer, like farmers who grow coffee and raise cattle. Then, those involved in the production stage, turning the raw materials into the end product. Then the consumers, like you and me, buying petrol from the pump and products from the supermarket shelf.

The 4 main groups of commodities

The four main commodity trading groups are livestock and meats, agricultural, metals, and energy.  The two most popular products for retail traders are Crude Oil and Gold.

Figure 1 Gold

Crude Oil and Gold are also the most liquid products in the commodity baskets resulting in low spreads, lowering the traders’ costs to trade.

Does Pepperstone offer commodity trading?

The simple answer is yes. Commodity trading through Pepperstone gives you the ability of trading 25 different commodities. This includes not only the popular Spot Gold and Crude Oil, but also Natural Gas, Spot Palladium, all the way down to soft commodities like Corn, Orange Juice and Oats.

The high liquidity also results in a fill rate of 99.95%* at Pepperstone. There is no physical delivery, and, with leverage, you can get higher exposure in the market than buying the physical product.

For a full list of commodities available at Pepperstone please click here.

*Based on 99.95%. Fill rates based on all trades 1-28 February 2022