Trading Commodities with TigerWit

Commodities are a group of tradable instruments that include precious metals and energies. There are many factors that can sway the direction of commodity values and traders look to benefit from every market move.

With TigerWit, you can trade about Crude Oil , Natural Gas .

Advantages of Commodity Trading with TigerWit

Trading Commodities with Leverage
If you wish to open deals on commodities that are larger than your available margin, leveraged trading allows you to do this and potentially benefiting from small market movements.
Go Long or Short on Commodities
Think a commodities value will rise or fall? With commodity trading from TigerWit, you can open trades in either direction.
Commodity Trading When You Want It
Whether you are using the MT4 platform with full EA integration or the innovative TigerWit trading app, you can open and close trades wherever you are.

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Commodities

What are commodities why do they matter?

Commodities are raw materials that are essential to our modern world they can act as the ingredients that drive industrial and chemical processes, power our transportation and literally drive our economies. But commodities are also foodstuffs or the basic ingredients for them.

Items that we consume every day without really thinking about it and without which we would live pretty dull lives if indeed we could live at all. It would not be going too far to say that commodities are the lifeblood of the global economy.

Commodities are typically grown or extracted. Agricultural commodities include Wheat, Corn Soybeans and live Cattle and dead pigs. Coffee and Sugar and some of the most widely traded commodities in the world.
Crude Oil powers our economies, it provides the fuels that allow ships to transport thousands of containers across the globe and passenger jets to fly across our continents and oceans.

Natural gas is a clean source of energy and it is playing a crucial role in our transition towards a lower-carbon future.

Gold and Silver are commodities used in jewellery and industrial processes, but they also act as alternative forms of money and a store of value in times of economic uncertainty. For example, gold is an essential part of many central bank’s foreign currency reserves.

Commodities trading ensures that our food and energy is available on-demand and that our economies can operate 24 /7. Without that commodities trading, the world would be a very different place.

How are commodities traded?

Commodity markets are some of the oldest organised markets in the world and there are specialist exchanges across the globe where commodities trading takes place. The largest of these exchanges are to be found in the USA, and Chicago in particular, thanks to its history, location, railway and road connections to both the eastern and western states of the USA.

Commodities trading uses futures contracts which offer market participants access to a fixed amount of a given commodity. Which will all be of the same pre-agreed quality or purity, that will be delivered to a fixed point or points on a known future date. Producers and consumers using these contracts can be completely confident about what they are trading in and what their obligations are.

Using commodity futures contracts, these groups (producers and consumers) can sell their future production and fix the costs of their raw materials and ingredients to the benefit of all.

In this way, commodities trading helps keep supply chains stable and efficiently matches the needs of producer and consumers.
The prices of commodity futures contracts reflect the changes in supply and demand and the seasonality of commodities that are grown or farmed. The weather and climate can influence the prices of Agricultural commodities and foodstuffs. The prices of precious metals and energy commodities are also subject to supply and demand, as well as the costs of transportation and storage geopolitics and conflicts etc.

Commodities trading is priced in US dollars and as such the prices of commodity futures contracts are directly linked to what happens to the US currency. If the dollar rises in value, then historically the prices of commodity futures contracts have tended to fall.

Whilst if the dollar falls in value then the prices of commodity futures contracts tend to rise in value. These moves in the prices of commodity futures contracts may be offset or compounded by changes in demand from large economies such as the US, China or Europe.

The near-continuous buying and selling of commodities helps to establish benchmark prices for them and to identify price levels at which we find supply and demand.

Commodities trading with TigerWit

Commodity futures are designed for use by commercial producers and consumers such as farmers and food companies, oil producers and energy companies who are buying and selling these products as part of their business and not for retail traders and speculators.

Most commodity futures are deliverable that is they are settled in the underlying product at the end of the contract lifetime, and the contact sizes can also be quite prohibitive.

To overcome these barriers to commodities trading TigerWit offers its clients the ability to trade in cash-settled CFDs or Contracts for Differences. Under a cash-settled contract, the counterparties to a trade, the buyer and seller agree to exchange the PnL or profit and loss generated by the trade. I.E. the winner pays the loser in cash avoiding the need for delivery of the underlying commodity.

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Trading commodities using CFDs

CFDs are traded over the counter or OTC and this means they don’t have a fixed expiry or delivery date as futures contracts do and positions in them can be held open for as long or short a timer as a trader wishes. What’s more, because there are no delivery months to consider using CFDs clients to trade a single cash price throughout the year.

Trading commodities using CFDs means that you will never own the underlying instead you are speculating on changes in the price of that commodity which in turn means that you can trade long or short of these commodities with equal ease.

TigerWit offers CFDs on two precious metals, Gold and Silver as well as three energy commodities which are WTI crude oil, Brent crude oil and Natural Gas. These contacts can be traded for 24 hours per day 5 days per week with just short trading breaks.
Commodities trading using CFDs takes place online using our app and trading platforms which you download when you open a trading account.

CFDs are leveraged products whereby your broker gears up or leverages your trading deposit to allow to control larger positions in the market than your funds would otherwise allow. The use of leverage in trading can magnify a trader’s profits but it can magnify trading losses just as easily and as such, the use of leverage should be understood and treated with respect.