13 Best Commodity Brokers & their Trading Platform Reviewed

Reviews

Best Commodity Brokers

Commodity brokers are individuals or companies that facilitate commodity trading. In short, they help commodity traders in buying or selling commodity products and charge fees or commissions for services rendered.

There are thousands of commodity brokers across the world. However, not all of them are worthy of your attention. Therefore, you need to choose a broker that is well-established, highly regulated, reliable, and offers features that suit you. Remember that picking the right broker for your trading endeavor is also as integral to your success as your trading strategy.

To help you find one of the best commodity brokers, we have thoroughly reviewed hundreds of brokers and also compiled a list of the very best brokers. Hence, we strongly believe that our list of the 13 best commodity brokers will help you find a broker that not only meets your expectations but also exceeds them.

13 best commodity brokers and their trading platforms

1. Plus500

Plus500 is a classic option for commodity traders looking for the best commodity broker and also commodity trading platform. It is the gateway to endless trading opportunities across more than 2,000 financial instruments. Moreover, Plus500 is also among the most trusted and established brokers having more than 4,30,000 + active clients.

Features

  • The WebTrader platform is one of the most popular and innovative trading platforms. In short, it offers numerous features like risk management, alerts, economic calendar, news & market insights, and much more.
  • Plus500 is also one of the CFD brokers specialized in CFD brokerage services. It also offers CFD trading for all financial instruments. Thus, you can trade CFDs on stocks, commodities, Forex, indices, options, ETFs, and cryptocurrencies.
  • Plus500 also offers one of the most reliable and innovative mobile trading platforms. You can also trade on the go with the help of a simple mobile application with numerous top-quality features.
  • Leverage of up to 1:150 on commodity CFDs, zero commission, and low spreads also make Plus500 a worthwhile commodity broker currently available in the market.

Account minimum

Plus500 requires a minimum deposit of $100 upon opening of account.

Pairs offered

Plus500 opens the door to commodity CFD trading opportunities on 22 commodities.

Fees

Plus500 doesn’t charge any commission and makes money from spreads. Its spread rates are also very competitive in the industry. However, the broker charges a $10 inactivity fee and also charges an overnight funding fee.

Best for

Plus500 is best for not charging a commission, low commodity CFD spread rates, and good customer service.

Regulation

Plus500 is also among the highly regulated commodity brokers. In other words, the Financial Conduct Authority (FCA), the Australian Securities and Investment Commission (ASIC), the Financial Market Authority (FMA), the Financial Sector Conduct Authority (FSCA), and the Monetary Authority of Singapore (MAS) regulate Plus500.

Funding methods

Plus500 supports bank transfer, credit/debit cards, and electronic wallets.

Pros

  • Supports more than 2,000 financial instruments for CFD trading including 22 commodities
  • Advanced WebTrader trading platform with innovative features
  • Highly regulated platform regulated by various regulatory authorities
  • Commission-free brokerage services
  • Low spreads
  • 24/7 and multilingual customer support services

Cons

  • Non-trading costs like inactivity fee
  • Less analytical and research tools as compared to various other brokers

2. AvaTrade

AvaTrade is another commodity broker that offers three trading platforms – MetaTrader 4, MetaTrader 5, and WebTrader. In fact, all AvaTrade’s trading platforms come with innovative features and a user-friendly interface. Moreover, if you want automated trading, no other commodity trading platform is better than AvaTrade. Additionally, the broker gives you access to the world’s most popular financial instruments. Thus, you can trade assets of your choice ranging from stocks and commodities to Forex pairs and cryptocurrency CFDs.

Features

  • MT4 and MT5 platforms come with numerous features like interactive charts, built-in indicators, multiple timeframes, and much more.
  • You can also access trading platforms from any type of device you have including PCs, Android, or iOS devices.
  • AvaTrade’s WebTrader platform is another great platform for traders, especially for beginners. It brings all the critical functionality directly from your web browser.
  • You can also get access to a huge variety of tradable CFD instruments including 15 commodity CFDs.
  • The leverage commodity CFD trading also helps you magnify your profits by amplifying your exposure to the markets.
  •  If you want to copy the trades of the most successful traders, then the AvaSocial platform will give you access to the AvaTrade community.
  • AvaTrade also offers the best multilingual customer support that guides you to resolve your issues with the utmost respect and compassion.

Account minimum

AvaTrade requires a minimum deposit of $100.

Pairs offered

AvaTrade offers CFDs on 15 commodities including precious metals, energy products, and agriculture.

Fees

AvaTrade’s CFD fees are low as compared to the industry’s standards. For example, the spread for gold is 0.34, $1.10 over the market for platinum, 0.03 for crude oil, and so on.

Best for

AvaTrade is best for offering a variety of trading platforms, innovative tools, social trading platforms, and competitive commodity CFD spreads.

Regulation

AvaTrade is another globally regulated broker that has secured licenses from 5 continents. ASIC in Australia, The Abu Dhabi Global Market Authorities (ADGM) and Financial Services Regulatory Authority (FSRA) in the Middle East, Financial Sector Conduct Authority (FSCA) in South Africa, British Virgin Islands (BVI) Financial Services Commission (FSC) in the British Virgin Islands, Financial Services Agency (FSA) and The Financial Futures Association of Japan (FFAJ) in Japan, and Investment Industry Regulatory Organization of Canada (IIROC) in Canada regulate AvaTrade.

Funding methods

AvaTrade supports a number of funding methods including bank transfer, credit/debit card, and electronic wallets.

Pros

  • A variety of robust trading platforms
  • Innovative features include free research tools
  • Seamless and quick account opening
  • Free deposit and withdrawals
  • Low commodity CFD spreads
  • Exceptional customer support services
  • Highly regulated CFD broker

Cons

  • High non-trading fees
  • Limited options for commodity CFD trading

3. Interactive Brokers Futures

Interactive Broker is a specialist in providing phenomenal trading in investment opportunities across a myriad of markets. The broker offers a unique trading platform Trader Workstation that is designed for traders looking for a flexible and powerful trading platform.

Features

  • Interactive Brokers offers a remarkable Client Portal that allows you to check quotes, place trades, reporting, funding, and much more.
  • More than 100 order types assist you in the perfect execution of your trading strategy.
  • You can trade futures globally in more than 30 market centers.
  • The platform also offers futures on commodities across metals, softs, agriculture, and energy.

Account Minimum

Interactive Brokers doesn’t require any account minimum.

Pairs Offered

Interactive Brokers offers futures on commodities across metals, softs, agriculture, and also energy.

Fees

Interactive Brokers’ commission on commodity futures ranges from USD 0.25 to USD 0.85 per contract.

Best For

Interactive Brokers is best for powerful and flexible trading platforms, remarkable research tools, low commission commodity futures, and margin accounts.

Regulation

Interactive Brokers is regulated by the Securities Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) in the US.

Funding Methods

Interactive Brokers supports numerous funding methods like wire transfer, checks, Automated Clearing House transfer, Canadian Electronic Funds Transfer, and also BPAY for Australian dollars only.

Pros

  • A great selection of trading and investing options
  • Powerful trading platform and research tools
  • Superior order execution
  • Low commission on commodity futures

Cons

  • The website is not user-friendly
  • Gold and silver trading is unavailable for residents of the US, Canada, Japan, Hong Kong, Australia, and New Zealand

4. eToro

eToro is one of the leading commodity brokers in the world. Being in the industry for more than 14 years now makes it one of the most established brokers. eToro offers CFDs on commodities to enable its clients to trade on financial instruments that they cannot normally trade. It is also among the most trusted commodity brokers as it is a highly regulated broker that has more than fifteen million users.

Features

  • eToro enables you to trade on commodity CFDs as well as other financial instruments like stocks, forex, ETFs, cryptocurrencies, and CFDs on a single innovative platform.
  • Furthermore, the broker enables you to trade on 32 commodities including top commodities like oil, gold, silver, and copper.
  • eToro’s Virtual Portfolio gives you the opportunity to learn to trade and gain experience without risking your money. Whereas, the Social Trading feature allows you to capitalize on the benefits of social trading and the combined wisdom of the social community.
  • eToro also gives you the golden opportunity to copy trades of expert traders through the CopyTrading feature.

Account minimum

eToro requires a $200 minimum deposit to open the account.

Pairs offered

eToro offers CFDs on 32 commodities.

Fees

CFD trading fees are not too much as compared to the industry’s standards. As, eToro charges just 2 pips on copper, 45 pips on gold, and so on. The highest spread is charged on Palladium that costs you 20,000 pips. However, non-trading fees are high such as a $5 withdrawal fee and a $10 inactivity fee.

Best for

eToro is one of the best commodity brokers that are best for offering a variety of commodities, social trading, and copy trading features.

Regulation

eToro is one of the highly regulated commodity trading platforms. The Financial Conduct Authority (FCA) in the UK, Cyprus Securities and Exchange Commission (CySEC) in Cyprus, and the Australian Securities and also Investment Commission (ASIC) in Australia regulate eToro. The company is also registered with De Nederlandsche Bank N.V. (DNB). eToro has also secured a license from the Seychelles Financial Securities Authority.

Funding methods

eToro offers three funding methods – bank transfers, credit/debit cards, and also electronic wallets.

Pros

  • User-friendly platform with numerous top-quality features
  • Distinguishing features like virtual account, copy trading, and social trading
  • Very easy and instant opening of an account
  • Supports a wide variety of commodity CFDs
  • Reasonable commodity trading fees

Cons

  • Supports only USD accounts
  • High non-trading fees such as the $5 withdrawal fee
  • Customer support can be improved

5. FP Markets

FP Markets is another spectacular option for commodity traders looking for a quality commodity broker. The broker offers MetaTrader 4 and MetaTrader 5 for its clients. You can trade on 60+ Forex pairs, 10,000 + stocks, 19 major indices, 8 commodity CFDs, and much more.

Features

  • MT4 is one of the best commodity trading platforms with user-friendly but powerful tools.
  • FP Markets also offers the leverage on commodity CFDs up to 500:1.
  • Trade commodities in any direction and go long or short according to your own speculation.
  • Additionally, FP Markets ensures faster trade execution and tighter spreads.
  • FP Markets also promises award-winning 24/5 multilingual customer support.

Account Minimum

FP Markets requires an account minimum deposit of $100.

Pairs Offered

FP Markets offer CFDs on 8 commodities across metals, energy, and also agricultural products.

Fees

FP Markets charges spread on commodity CFDs ranging from 0. 012 pips for Silver to 0.56 pips for gold.

Best For

FP Markets is best for low margin, higher leverage, and powerful MT4 trading platform.

Regulation

FP Markets is authorized by the Australian Securities and Investment Commission (ASIC).

Funding Methods

FP Markets supports 10 funding options in 10 different base currencies. It accepts bank transfers, credit/debit cards, BPAY, PayPal, POLi, NETELLER, Skrill, and others.

Pros

  • MT4 trading platform with numerous top-quality features
  • Higher leverage and tight spreads
  • 24/5 multilingual customer support
  • Established and regulated commodity broker

Cons

  • Limited commodity CFD options
  • Lacks in research and education

6. XTB

XTB is another one of the best commodity brokers. The company has been in the business for more than 15 years and has offices in more than 13 countries including the UK, France, Germany, Poland, and Chile. XTB offers one of the best commodity trading platforms that are also user-friendly and highly customizable. Additionally, features like the best execution speed, trader’s calculator, sentiment, innovative charts, performance statistics, market order depth, and many others make xStation one of the most versatile trading platforms.

Features

  • xStation is another one of the most robust, reliable, and innovative trading platforms that accompanies numerous remarkable features.
  • The platform also has a simple but intuitive design that makes it really easy for you to manage your financial assets quicker and easier.
  • xStation mobile app is also a good one that helps you explore the vast world of trading on the go.
  • XTB also ensures 24/7 customer support services to answer your queries and solve your issues through a really supportive team.
  • XTB offers commodity CFDs on 22 commodities across soft and hard commodities.

Account minimum

There is no account minimum requirement for opening an account on XTB.

Pairs offered

XTB also gives you access to 22 commodities for commodity CFD trading.

Fees

XTB fees are competitive and it charges different spread rates on account types. For example, FX spread for a standard account is 0.5 while a Pro account spread is 0.1. XTB also charges a commission of $3.50 per lot for trades on the Pro account. XTB also charges a €10 inactivity fee.

Best for

XTB is best for offering the best safety, competitive commodity CFD spreads, and good customer service.

Regulation

The Financial Conduct Authority (FCA), UK, Financial Supervision Authority (KNF), Poland, Cyprus Securities and Exchange Commission (CySEC), Cyprus, and the International Financial Services Commission, Belize regulate XTB. It is also among the commodity brokers listed on the stock exchange.

Funding methods

XTB supports a wide variety of funding methods including bank transfer, Visa/Mastercard/Maestro credit cards, and Skrill/Paysafe/safety pay/Neteller electronic wallets.

Pros

  • xStation 5 is one of the best and user-friendly trading platform
  • Established and one of the most trusted brokers
  • A wide variety of tradable assets including 22 commodity CFDs
  • Low spreads
  • Clients’ accounts protection is available
  • Highly regulated broker
  • Great customer service

Cons

  • Doesn’t facilitate clients from the USA
  • Lacks in backtesting or automated trading facilities

7. Pepperstone

Pepperstone is another commodity broker that offers an award-winning commodity trading platform. The platform empowers traders to discover opportunities on more than twelve hundred financial instruments. The extensive range of CFDs on commodities, stocks, Forex, ETFs, cryptocurrencies, and more grants you the freedom of CFD trading. Pepperstone also allows traders to choose from three different trading platforms, MetaTrader 5, MetaTrader 4, and cTrader. It also gives you the opportunity to follow and copy trades of other successful traders on the social trading platform.

Features

  • A variety of trading platforms, MetaTrader 5, MetaTrader 4, cTrader, and Social trading, makes Pepperstone also a unique commodity trading broker.
  • It gives you the opportunity to trade CFDs on 32 commodities across major metals, soft commodities, and energy.
  • More than twelve hundred financial instruments across stocks, Forex, commodities, indices, currency indices, ETFs, and cryptocurrencies give you access to the trading world of opportunities.
  • A demo account gives you the opportunity to see if CFD trading really suits you. It also allows you to learn and gain experience without risking a single penny of your capital.
  • Pepperstone is also a safe, fast, and reliable commodity broker at which you don’t need desk intervention to close deals.
  • Pepperstone also allows you to choose the type of account that suits you from two account types -Standard and Razor.
  • Customer support is available 24/5 during weekdays and 18 hours during weekends.

Account minimum

There are no account minimum requirements for trading on Pepperstone.

Pairs offered

Pepperstone gives you the opportunity to trade on 32 commodity CFDs.

Fees

Pepperstone offers the lowest spread rates such as Spot Gold ($) costs 0.05 and 0.13 minimum and average spread respectively.

Best for

Pepperstone is also best for offering three trading platforms alongside the Social Trading platform, no account minimum requirements, zero commission, and tight spreads.

Regulation

Pepperstone is also among the highly regulated trading platforms. It is regulated by the world’s most popular regulatory authorities – FCA, CySEC, ASIC, DFSA, SCB, BaFin, and CMA.

Funding methods

Pepperstone supports multiple funding methods such as bank transfer, credit/debit cards, and electronic wallets like PayPal, Neteller, Skrill, and Union Pay.

Pros

  • Three different trading platforms MT5, MT4, and cTrader
  • Social trading
  • User-friendly interface
  • Demo account facility
  • No account minimum requirements
  • Mobile applications for android and iOS
  • Negative balance protection of UK and European clients
  • Exceptional customer support

Cons

  • Negative balance protection is limited to the UK and European clients

8. TD Ameritrade Futures

TD Ameritrade is among the best commodity brokers that offer the Thinkorswim platform for serious traders. That is to say the platform brings elite-level tools that make your trading seamless. The platform also provides unique trading ideas through market scans and also monitors potential risk/reward. In addition to, TD Ameritrade gives you the opportunity to trade commodity futures on 39 commodities across different commodity classifications.

Features

  • Powerful but user-friendly Thinkorswim and web trading platforms with numerous exquisite features.
  • The broker also offers the highest number of commodity futures to diversify your portfolio.
  • You can also have fully functional mobile applications optimized for different devices.
  • TD Ameritrade also brings transparent, straightforward, and fair pricing for commodity futures.

Account Minimum

TD Ameritrade has also no account minimum requirements.

Pairs Offered

TD Ameritrade offers commodity futures on 39 commodities across metals, energy, and agricultural products.

Fees

TD Ameritrade charges $2.50 per contract on commodity futures.

Best For

TD Ameritrade is the best for powerful trading platforms, responsive mobile applications, a wide selection of commodity futures, and also fair pricing.

Regulation

TD Ameritrade is regulated by Financial Conduct Authority (FCA), Securities Futures Commission (SFC), the Commodities Futures Trading Commission (CFTC), Monetary Authority of Singapore (MAS), and the Investment Industry Regulatory Organization of Canada (IIROC).

Funding Methods

TD Ameritrade supports electronic bank deposits, wire transfers, checks, and account transfers from another firm.

Pros

  • Well designed, powerful, and innovative trading platforms
  • Power tools
  • A wide selection of commodity futures
  • One of the highly regulated commodity trading platforms
  • The best education system for beginners

Cons

  • Commission on commodity futures is slightly higher
  • Doesn’t support credit/debit cards

9. EasyMarkets

EasyMarkets is one of the most trusted and established commodity brokers with more than 18 years of experience. The broker offers a selection of trading platforms including MT4, dedicated web platform, and also TradingView. As a result, all of the platforms bring multiple fundamental and technical tools, fast execution, market updates, and much more.

Features

  • EasyMarkets mobile application is intuitive and user-friendly with multiple features.
  • You can use the EasyMarkets account to access TradingView that offers numerous key features such as deep market insights, social trading, and much more.
  • EasyMarkets supports a wide variety of funding methods in different base currencies.

Account Minimum

EasyMarkets requires a minimum deposit of $100.

Pairs Offered

EasyMarkets offers copper and 12 other commodities for traders to trade on.

Fees

EasyMarkets charges spread ranging between as low as 3 pips on oil and as high as 200 pips on soybean.

Best For

EasyMarkets is best for intuitive trading platforms, responsive mobile applications, and also for supporting multiple funding methods.

Regulation

EasyMarkets is authorized by the Australian Securities and Investment Commission (ASIC).

Funding Methods

EasyMarkets supports 20 different funding methods including credit/debit cards and electronic wallets such as PayPal, Neteller, Skrill, and UnionPay.

Pros

  • One of the most established commodity brokers
  • Offers different trading platforms for traders with different requirements
  • Regulated platform
  • Supports multiple funding methods

Cons

  • A limited number of commodities for trading
  • Low leverage as per industry’s standards

10. TradeStation Go Futures

TradeStation is another one of the top commodity brokers with one of the best commodity trading platforms. The platform provides the right platform and tools that are powerful and reliable. Being in the industry for more than thirty years, TradeStation understands the needs of commodity traders and leaves no stone unturned to deliver the best services in the industry.

Features

  • TradeStation trading platform is among the best that assists you in optimizing and automating your trading strategies.
  • The broker provides fully customizable charts, advanced order management, a market scanner, and many other enticing features.
  • A wide variety of futures and futures options including metals and energy products.
  • Exquisite educational resources, free-market data, and many other similar features are also provided by the broker.

Account Minimum

TradeStation has no account minimum requirements.

Pairs Offered

TradeStation offers over 350 futures and futures options including precious metals and 9 energy products.

Fees

TradeStation charges a commission of $1.50 per futures contract.

Best For

TradeStation is best for its trading platform, competitive commission, and free-market data.

Regulation

The Securities Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) regulate TradeStation.

Funding Methods

TradeStation supports Smart Transfer, wire transfer, checks, and electronic wallets.

Pros

  • One of the most powerful commodity trading platforms
  • One of the most established and trusted platforms
  • Highly customizable tools
  • Competitive commission on futures contracts

Cons

  • Limited futures options on commodities

11. E*TRADE Futures

E*TRADE is one of the most popular commodity brokers. To sum up, this broker is a commodity trading platform with intuitive, powerful, and user-friendly features. It also offers spectacular charting features, risk analysis tools, and many other enticing features that make CFD trading extremely easy. In addition, E*TRADE offers futures contracts on a wide variety of financial instruments including commodities.

Features

  • Remarkable trading platform with advanced charting, technical analysis tools, indicators, and much more.
  • E*TRADE mobile app is intuitive, feature-rich, and ever-innovating.
  • E*TRADE offers an extensive range of financial instruments across a wide variety of markets including 33 futures contracts on commodities.

Account Minimum

E*TRADE doesn’t require any account minimum.

Pairs Offered

E*TRADE offers futures contracts on 33 commodities.

Fees

E*TRADE charges a $1.50 commodity futures contracts commission.

Best For

E*TRADE is best for the intuitive platform and its features and low futures contracts commission.

Regulation

E*TRADE is regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Funding Methods

E*TRADE supports bank transfer, wire transfer, and check deposits.

Pros

  • Intuitive and user-friendly platform
  • Extensive research access
  • Exceptional customer support services
  • Competitive futures contracts commission

Cons

  • Difficult to navigate website
  • Credit/debit cards are not acceptable

12. XM

XM was established in 2009 and since then it has grown at an astonishing pace since its inception. The broker’s flexible trading conditions and trading platforms suit traders of every size and level of experience. You can trade on MetaTrader 4 with flexible leverage ranging from 1:1 to 888:1. MetaTrader 5 is another option for traders, especially for traders looking for more advanced trading tools and additional CFD products. Moreover, XM is also one of the safest and authorized commodity brokers.

Features

  • XM users have a collection of 16 trading platforms to choose from and trade from anywhere.
  • Traders can capitalize on free daily technical analysis and as a result make informed trading decisions without having to conduct technical analysis on their own.
  • 24/5 customer support in more than thirty languages indicates the broker’s emphasis on providing quality customer support services.

Account minimum

The minimum deposit required for starting trading on XM is $5-$100.

Pairs offered

XM offers commodity CFDs on 8 commodities.

Fees

XM makes money through spreads. The broker offers tight spreads as low as 0.0047 pips on high-grade copper and 0.006 pips on sugar.

Best for

XM broker is best for a collection of commodity trading platforms, free daily technical analysis, and also customer support.

Regulation

XM is also among the CFD brokers authorized by two tier-1 authorities. The Australian Securities and Investment Commission (ASIC) and the Financial Conduct Authority (FCA) regulate and authorize XM brokers.

Funding methods

XM supports funding methods like bank transfer, credit/debit cards, and electronic wallets.

Pros

  • Easy and straightforward opening of account
  • Highly regulated CFD broker
  • No withdrawal fees
  • Several account base currencies
  • Quality educational content

Cons

  • Limited commodity CFD products
  • Lacks in some advanced charting and other key features

13. Charles Schwab Futures

Charles Schwab is another big commodity broker that offers one of the best commodity trading platforms. It is known as StreetSmart Edge and offers linked tools that make commodity trading seamlessly easy.

Features

  • StreetSmart Edge aligns and optimizes its tools for a unique trading experience.
  • You can trade on futures products across a variety of commodity categories – for example: metals, agriculture, and energy.
  • Charles Schwab’s Futures Research Center provides the latest research and news to keep you informed and make rational commodity trading decisions.

Account Minimum

Charles Schwab doesn’t require any account minimum.

Pairs Offered

Charles Schwab offers futures products on 9 commodities – gold, silver, steel, corn, wheat, sugar, crude oil, natural gas, and electricity.

Fees

Charles Schwab charges $2.25 per contract for futures contracts on commodities.

Best For

Charles Schwab is the best intuitive commodity trading platform, zero commission, and also low futures contracts fee.

Regulation

Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), and Commodity Futures Trading Commission (CFTC) regulate Charles Schwab.

Funding Methods

Charles Schwab supports bank transfers and also electronic wallets.

Pros

  • Powerful trading platform
  • Exceptional research tools
  • Feature-rich broker
  • Multiple remarkable features to keep clients updated

Cons

  • A limited number of commodity futures contracts
  • Slightly higher futures fees

What is commodity trading?

There are two distinct sub-categories of commodities, soft and hard commodities. Soft commodities include things that people grow or harvest and generally use for consumption. Popular soft commodities for trading are wheat, sugar, corn, orange juice, cattle, etc. for instance. These commodities are being heavily traded on stock exchanges across the globe.

Hard commodities, on the other hand, include things that people extract or mine. For example, gold, and energy products like oil and gas are hard commodities. That is to say precious metals like gold and platinum, industrial metals, and energies are some of the most popular and widely traded hard commodities.

So, commodity trading revolves around commodities and all of them bring great trading opportunities. It takes place on distinctive exchanges known as commodity exchanges.
For example, here are among the most notable commodity exchanges all across the globe: the London Metal Exchange (LME), the Chicago Mercantile Exchange (CME), the Tokyo Commodity Exchange (TOCOM), the Dubai Mercantile Exchange (DME), the Zhengzhou Commodity Exchange (ZME) and Dutch Climax.

How to trade commodities?

Traders trade commodities through futures contracts or equity markets, Exchange Traded Funds (ETFs), mutual funds, or Contracts For Difference (CFDs). However, CFD trading is among the most popular ways of trading. CFDs on commodities demand low initial capital but ensure higher leverage.

What are commodity brokers and what are the main classifications of commodity brokers?

A commodity broker is an individual or a firm that facilitates commodity trading. Commodity brokers place trades on global exchanges on behalf of their clients. There are hundreds of commodity brokers worldwide with floor presence in the world’s all main commodity markets. However, the advent of online trading influenced commodity brokers and now, almost all of them offer trading platforms for clients.

Classifications of commodity brokers

For example, there are several classifications of commodity brokers:

  • Floor Broker (FB) – FB is an independent member of an exchange who acts as a broker for other members in need of help in their order flow processing.
  • Futures Commission Merchant (FCM) – FCM executes orders on behalf of clients and charges commission for service provided. FCMs are also required by relevant regulatory authorities to maintain their registration.
  • Introducing Broker (IB) – An IB offers commodity trading advice to clients. IBs generally are in direct contact with their clients and provide superior customer services.
  • Commodity Trading Advisor (CTA) – A CTA provides commodity investment advice and ensures quality trading services. CTAs are generally hired by financial institutions like banks, hedge funds, mutual funds, etc. for their expertise.
  • Commodity Pool Operator (CPO) – A CPO facilitates commodity investments by institutions and manages trading on exchanges. As a result, CPOs employ various strategies, leverage, and products to achieve what they are expected to achieve.
  • Associated Person (AP) – An AP acts as a commodity trading facilitator and supervises transactions. In other words, APs are employees of FBs, FCMs, CTAs, and CPOs.

What makes a good commodity broker?

If you want to excel in commodity trading, then it is important to choose the right commodity broker. You need to consider a few important aspects, that make a good commodity broker, before making your final decision.

Established and regulated brokers

A well-managed commodity broker has years of operational experience and it also is highly regulated.

Type of trading platforms and features

Different trading platforms offer different features. You need to know before committing to a broker whether its platform and features suit you or not. However, almost all popular commodity brokers offer two or more trading platforms that give their clients the opportunity to choose the one that suits them.

Trading instruments

A great broker offers numerous trading instruments for its clients. It therefore helps clients diversify portfolios. You need to make sure whether the broker provides instruments you prefer or not.

Funding and withdrawal methods

Good commodity brokers support various funding and also withdrawal methods. As a result, you need to ensure that the broker supports funding and withdrawal methods that are convenient for you.

Leverage and margin

Big commodity brokers also offer competitive leverage to enable their clients to enhance profitability on their portfolios.

Commissions and fees

Commissions and trading fees are among the most influential aspects that impact your trading output. In short, mostly all established brokers offer competitive fees. Still, you need to choose a broker that fits your bill.

Account type

All commodity brokers offer different account types. As a result, you need to carefully read all the offerings of account types and choose one that suits your trading ambitions.

Customer support services

You also need to choose a broker that ensures excellent 24/7 customer support services.

Mobile app

Mobile application is another defining aspect that directly influences trading. Hence, a broker offering a fully functional mobile application suits you better. Because it allows you to trade on the go from anywhere in the world.

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