In addition to energy and metal contracts, we offer a range of soft commodity products to trade, including corn, soybeans, sugar, coffee, and wheat as CFDs.
Sounds exciting, doesn’t it? And it is, provided you’re familiar with the fundamentals of soft commodity trading. Population growth is the long-term driver of commodity prices since inevitably people will always require food, clothing, transport and electronic devices, amongst many other desires.
What are commodities?
The difference between forex trading and commodity trading is primarily the products underlying tradable security. A commodity market trades in goods such as coffee, cocoa, and mined products such as gold and oil. Forex is a global market that trades in currencies such as dollars, euros, and yen.
Overview of the market
The commodities markets are very regulated, while forex is more like the Wild West. There is some regulation with forex, but it’s not as tightly regulated. There is a fair amount of circumvention of what little regulation exists already. Some traders feel they are better off with the government on their side.
Commodities trade on an exchange, where foreign exchanges are over-the-counter and traded through brokers or in the interbank market. By trading on an exchange, commodities have daily range limits.