CFD Commodity Trading

Contributor Image
Written By
Contributor Image
Written By
Jemma Grist
Jemma is a writer, editor and fact-checker focused on retail trading and investing. Jemma brings a unique perspective to the forex, stock, and cryptocurrency markets and works across several investment websites as a researcher and broker analyst.
Contributor Image
Edited By
Contributor Image
Edited By
Tobias Robinson
Tobias is a partner at DayTrading.com, director of a UK limited company and active trader. He has over 25 years of experience in the financial industry and contributed via CySec to the regulatory response to digital options and CFD trading in Europe. Toby’s expertise and dedication to financial education make him a trusted voice in the industry, including a BBC investigation into digital options.
Contributor Image
Fact Checked By
Contributor Image
Fact Checked By
William Berg
William contributes to several investment websites, leveraging his experience as a consultant for IPOs in the Nordic market and background providing localization for forex trading software. William has worked as a writer and fact-checker for a long row of financial publications.
Updated

Contract For Difference (CFD) commodity trading allows for investors to bid on the changes in the value of particular commodities. CFDs do not require the trader to own the commodities themselves, only the difference from the initial price is exchanged between the broker and investor when the trade is complete. This article will discuss what commodities are, what CFD commodity trading is, what to look out for and the best online brokers.

Best CFD Commodity Trading Brokers

Here is a short summary of why we think each broker belongs in this top list:

  1. Interactive Brokers - Over 8,000 CFDs are offered on a vast array of instruments, encompassing stocks, indices, forex, and commodities. Moreover, the TWS platform lends itself to seasoned day traders, offering a comprehensive selection of over 100 order types and algorithms, alongside premium market data sourced from reputable sources such as Reuters and Dow Jones.
  2. UnitedPips - UnitedPips supports CFD trading on a narrow selection of currencies, metals and cryptos. It somewhat compensates for the meagre asset range with high leverage up to 1:1000, seriously amplifying potential profits or losses, and spreads that don’t change with market conditions.
  3. IQCent - CFDs are available on forex, indices, commodities and cryptos, although the range of 175+ instruments is limited compared to alternatives such as Quotex with 400+. Leverage is available up to 1:500 but the $250 minimum deposit is noticeably higher than competitors.
  4. Capitalcore - The range of CFDs at Capitalcore is narrow, with 6 precious metals, 6 indices, and a slim suite of stocks. Notably, there are no commodities such as oil or gas and spreads vary greatly. Tiered leverage is available depending on the account, from 1:100 to 1:2000.
  5. Videforex - Videforex CFDs are available on forex, indices, cryptocurrencies and commodities with up to 1:500 leverage and tight spreads from near zero. CFDs incur a commission fee of 1%–2.5% and up to 5% for leveraged trades.
  6. Sage FX - Trade CFDs on forex, stocks, metals, energies, indices, cryptos and dollar futures. Sage FX offers tight spreads and high leverage on all instruments from 1:100 to 1:500.

CFD Commodity Trading Comparison

CFD Commodity Trading Comparison
Broker CFD Leverage Minimum Deposit Minimum Trade Regulators
Interactive Brokers 1:50 $0 $100 FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA, AFM
UnitedPips 1:1000 $10 0.01 Lots IFSA
IQCent 1:500 $250 $0.01 IFMRRC
Capitalcore 1:2000 $10 0.01 Lots IFSA
Videforex 1:500 $250 $0.01 -
Sage FX 1:500 $10 0.01 Lots Pending

Interactive Brokers

"Interactive Brokers is one of the best brokers for advanced day traders, providing powerful charting platforms, real-time data, and customizable layouts, notably through the new IBKR Desktop application. Its superb pricing and advanced order options also make it highly attractive for day traders, while its diverse range of equities is still among the best in the industry."

Christian Harris Christian Harris, Reviewer

Interactive Brokers Quick Facts

FTSE Spread0.005% (£1 Min)
GBPUSD Spread0.08-0.20 bps x trade value
Stocks Spread0.003
Leverage1:50
RegulatorFCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA, AFM
PlatformsTrader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, TradingView, eSignal, TradingCentral, ProRealTime, Quantower
Account CurrenciesUSD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF

Pros

  • With low commissions, tight spreads and a transparent fee structure, IBKR delivers a cost-effective environment for short-term traders.
  • Interactive Brokers has launched ForecastTrader, a unique, zero-commission product where users can trade yes/no Forecast Contracts on political, economic, and climate events, with fixed $1 payouts per contract, 24/6 market access, and 3.83% APY on held positions.
  • The new IBKR Desktop platform takes the best of TWS while adding bespoke tools like Option Lattice and Screeners with MultiSort to create a genuinely impressive trading experience for day traders at every level.

Cons

  • TWS’s learning curve is steep, and beginners may find it challenging to navigate the platform and understand all the features. Plus500's web platform is much better suited to new traders.
  • Support can be slow and frustrating based on tests, so you might find it challenging to reach customer service representatives promptly or encounter delays in resolving issues.
  • You can only have one active session per account, so you can’t have your desktop program and mobile app running simultaneously, making for a sometimes frustrating trading experience.

UnitedPips

"UnitedPips is ideal for traders seeking leveraged trading opportunities, the security of fixed spreads, and the flexibility to deposit, withdraw, and trade cryptocurrencies - all in one sleek TradingView-powered platform."

Christian Harris Christian Harris, Reviewer

UnitedPips Quick Facts

Bonus Offer40% Deposit Bonus
FTSE SpreadNA
GBPUSD Spread1.3
Stocks SpreadNA
Leverage1:1000
RegulatorIFSA
PlatformsUniTrader
Account CurrenciesUSD

Pros

  • UnitedPips’ platform performs well, with an intuitive design that will appeal to beginners, while the TradingView integration delivers powerful charting tools without overwhelming users, making it straightforward to execute trades efficiently.
  • UnitedPips offers impressive leverage up to 1:1000 with zero swap fees or commissions, which can enhance potential returns for day traders and swing traders looking to control prominent positions with less capital.
  • Although being handed off mid-chat due to shift changes during testing was frustrating, customer support is generally good with quick, helpful responses, and 24/7 support via phone and email for regional teams is a definite advantage.

Cons

  • UnitedPips' selection of tradable instruments is still minimal, comprising a bare minimum selection of forex, metals and crypto. There are no equities, indices or ETFs, which may be a drawback for experienced traders looking for diverse opportunities.
  • Unlike brokers such as IG, UnitedPips is an offshore broker not regulated by any 'green tier' financial authorities, raising concerns for traders seeking assurance and protection under well-established regulatory frameworks.
  • UnitedPips lacks comprehensive research, while the educational content for beginner traders is woeful. Compared to brokers like eToro, which offers tutorials, webinars, and advanced courses, UnitedPips offers minimal resources to help new traders understand key concepts.

IQCent

"IQCent will appeal to day traders looking for a straightforward binary options and CFD trading platform with low fees, a range of accounts, and copy trading. Getting started takes less than 1 minute and a $250 deposit. "

Jemma Grist Jemma Grist, Reviewer

IQCent Quick Facts

Bonus Offer20% to 200% Deposit Bonus
FTSE Spread1.4
GBPUSD Spread0.8
Stocks SpreadN/A
Leverage1:500
RegulatorIFMRRC
PlatformsOnline Platform, TradingView
Account CurrenciesUSD, EUR

Pros

  • The broker's 24/7 customer support is fast and reliable, responding within 1 minute during tests
  • Keen traders can take part in trading contests with cash prizes
  • IQCent has bolstered its asset range with 60+ new assets, including hot cryptos like TON and SHIB; top-tier stock CFDs such as TSLA and NVDA; plus exotic FX pairs like THB and HUF

Cons

  • IQCent charges a punitive $10 monthly inactivity fee if you fail to place at least 1 trade per month
  • The market analysis is very basic with limited technical summaries and insights from analysts
  • The broker is not overseen by a respected regulator, though this is common among binary options firms

Capitalcore

"The major selling points of Capitalcore are its high leverage options up to 1:2000 and zero commission or swap fees. However, its weak regulatory oversight from the IFSA and non-existent education place it far behind the top brokers."

Christian Harris Christian Harris, Reviewer

Capitalcore Quick Facts

Bonus Offer40% Deposit Bonus up to $2,500
FTSE Spread25
GBPUSD Spread0.5
Stocks Spread1.5 (Apple)
Leverage1:2000
RegulatorIFSA
PlatformsWebTrader, Pro
Account CurrenciesUSD

Pros

  • The Capitalcore platform provides comprehensive charting tools and a wide range of 150+ technical indicators, ideal for detailed market analysis.
  • Unlike most brokers, Capitalcore offers an unlimited demo account that takes under 5 minutes to open.
  • Capitalcore has added binary options trading on 30+ currency pairs, metals and crypto with one-click trading and payouts up to 95%.

Cons

  • Capitalcore’s threadbare education and research seriously trail category leaders like IG, making it less suitable for aspiring traders.
  • Capitalcore is not regulated by major financial authorities and has an unproven reputation, raising concerns about the safety of client funds.
  • Platform support is limited to proprietary software, so there's no integration with the market-leading MetaTrader or cTrader, which offer built-in economic news and support automated trading.

Videforex

"Videforex will serve traders looking for a no-frills, easy-to-use platform to speculate on the direction of popular financial markets through binaries. With a sign-up process that takes a matter of minutes and a web-accessible platform, getting started is a breeze. "

William Berg William Berg, Reviewer

Videforex Quick Facts

Bonus Offer20% to 200% Deposit Bonus
FTSE SpreadFloating from 0.2
GBPUSD SpreadFloating from 0.1
Stocks SpreadNA
Leverage1:500
PlatformsTradingView
Account CurrenciesUSD, EUR, GBP, AUD, RUB

Pros

  • Videforex regularly runs trading contests, offering practice opportunities and cash prizes to beginners and experienced traders, with position sizes from just ¢0.01.
  • Videforex is one of the few brokers with 24/7 multilingual video support, providing comprehensive assistance for active traders.
  • With the addition of over 60 new assets, Videforex now gives traders access to in-demand crypto (TON, ARB, PEPE, SHIB), top-performing tech stocks (Tesla, Meta, Nvidia, Amazon), and a more diverse FX portfolio (THB, ZAR, and MXN).

Cons

  • The absence of any educational tools is a serious drawback for newer traders who can find blogs, videos and live trading sessions at category leaders.
  • Videforex lacks authorization from a trusted regulator, meaning traders may receive little to zero safeguards like segregated client accounts.
  • The client terminal needs improvements based on our latest tests, sporting sometimes slow and unresponsive widgets which could dampen the experience for day traders.

Sage FX

"Sage FX will suit forex traders looking for high leverage and ECN spreads. The broker's prop trading service will also appeal to users looking for funded accounts with up to $200K available."

Tobias Robinson Tobias Robinson, Reviewer

Sage FX Quick Facts

Bonus Offer$1,500 trading competition
FTSE Spread5.0
GBPUSD Spread0.9
Stocks SpreadN/A
Leverage1:500
RegulatorPending
PlatformsTradeLocker
Account CurrenciesUSD, EUR, GBP, CAD, AUD

Pros

  • Fast withdrawal processing
  • Low starting deposit from $10
  • Prop trading accounts with multiple funding tiers

Cons

  • Not regulated by any reputable body
  • Relatively narrow range of asset classes
  • Lacks educational resources and other extra features

What Are Commodities?

A commodity is a physical good that is usually a natural resource. Commodities of the same type are considered (almost) equal, no matter who produced them.

Goods and commodities that are fungible are not differentiated by brands or quality and their prices are determined by the performance of the market as a whole, closely following supply and demand.

Examples of goods that are used for CFD commodity trading are precious metals, oil and agricultural goods like rice.

Hard Commodities

Hard commodities are defined as those that are mined or extracted from the earth, i.e. natural resources that are not renewable. These are generally the most popular for CFD commodity trading and can be categorised into the following:

Metals

Metal commodities include gold, silver, copper and platinum. These metals are used in a variety of applications, such as jewellery (gold, silver), electronic wiring (copper) and other industrial uses (platinum, copper, silver etc.). Precious metals are, at times, invested in due to their reputation of being reliable stores of value, which can provide stability to some during periods of extreme market volatility.

Energy

Energy commodities consist of resources such as oil, natural gas, gasoline, etc. These commodities can also have other applications such as the production of plastics (oil), transportation (gasoline) and generating electricity (gas). Geopolitical factors can influence the price of oil, particularly the policies of OPEC (Organisation of Petroleum Exporting Countries).

Soft Commodities

Soft commodities are defined as those that can be grown and cultivated, i.e. renewable resources. As such, the prices of these commodities are often more volatile, depending on external factors like climate and other environmental conditions. This has led to less popularity for CFD commodity trading than hard commodities, though investors with a large risk appetite may prefer these.

Agriculture

Agricultural commodities are natural resources like wheat, rice, coffee and corn. These are used as sources of food for both people and livestock, as well as the production of other products. It is common for the price of these goods to be heavily impacted by periods of turbulent weather, population growth and natural disasters.

Why Are Commodities Suitable For CFD Trading?

The price of commodities is affected by the concept of supply and demand. If there is more demand for the good than supply, then the price of the commodity increases, and vice versa. The growth of large economies like India and China has led to increases in the demand for various goods, such as metals and energy.

Pros & Cons

Key takeaways that you should keep in mind about why CFD commodity trading could be beneficial to you are:

However, there are negatives that you should be aware of and understand before CFD commodity trading:

Strategies

CFD commodity trading is a different playing field from investing in company stocks. Given that CFDs are used for the most part as short-term investments, you will likely want to employ short-term intraday trading strategies when trading gold, coffee or other commodities.

You should also check the hours that the particular markets are open for trade. For coffee, the CFD commodity trading hours may be different from those of UK oil. As a general rule of thumb, CFD commodity trading can be conducted provided that the physical commodity market is open for trading.

News

You must look at the current price trends and latest news releases before beginning CFD commodity trading. Given that commodities are greatly influenced by supply and demand, you should take a bit of time to make yourself familiar with the particular instrument that you are interested in.

Is there a shortage of the particular commodity? Is there a surplus due to an exceptional harvest? Are there any laws or regulations being implemented that may impact the commodity? These are the sorts of questions you should be asking.

Hedging

As CFD commodity trading allows you to “short” a market, so you can trade any drop in value, you can utilise this as a means of counterbalancing your investment portfolio.

If you predict a sell-off of a commodity that you have already invested in, you can obtain short CFDs at a fraction of the price (using the margin decided by your broker) for the same amount of the commodity you possess.

This means any losses would be offset by the returns you make on the short CFD trade.

Check that your broker permits hedging first.

Scalping

This is one of the more popular strategies for CFD commodity trading. The aim of scalping is to exit positions quickly, with the aim of making small gains, reducing the risk of losing money from market reversals.

Again, check your broker permits scalping prior to trading.

As individual gains are often low, high margin levels are often used and a large number of trades are made throughout the day.

How To Start CFD Commodity Trading

Choose A Broker

To begin CFD commodity trading, you will need to choose a broker. Some of the key factors to consider are:

Popular CFD brokers such as Trading 212 and eToro allow you to trade most commodities — especially popular ones like gold — using CFDs.

Opening Your Position

Before opening any position on a commodity of your choice, you should only invest an amount that you are comfortable with losing.

On most broker platforms, opening up a CFD commodity trading position is simple and easy. You will be presented with an option to buy (go long) or sell (short) your chosen commodity. Going long on a commodity will mean that you will gain when the price of the commodity increases while shorting a commodity is the opposite.

The CFD trading view on the broker platform should offer you most of the information you require to place your position, such as any graphs and informatics on the chosen commodity market.

Monitoring Your Position

Given that the losses incurred when CFD commodity trading can be considerable and profit windows can be slim, you should keep tabs on any open positions.

If you believe that the commodity market in which you invested is beginning to move in the wrong direction, you should consider exiting to reduce or avoid losses. Some platforms allow you to place stop-limit boundaries, which help you define your acceptable loss limit before automatically exiting.

Tips For Trading

Here are a few helpful tips that you can take on board whilst CFD commodity trading:

Final Word

CFD commodity trading greatly improves the accessibility of the commodities markets, allowing retail traders to viably trade price fluctuations of natural resources without the logistic issues presented by physically purchasing the goods. CFDs also allow for margin trading, automated trading and the shorting of commodities from gold to crude oil to coffee beans. To get started with CFD commodity trading today, see our list of the top brokers here.

FAQs

What Is CFD Commodity Trading?

This is a form of derivatives trading that allows traders to speculate on commodity prices without owning the assets in question. When trading a commodity with a CFD, it allows the investor to speculate on the future price of that commodity without having to actually own it. One of the advantages of this method is that you can profit from the decrease in value as well as the increase.

What Are Commodities?

Commodities are physical goods that are often heavily involved in international trade. These can be energy sources like natural gas, precious metals like gold and silver or agricultural products like wheat or tea.

Supply and Demand?

Supply and demand is an economic model of price determination that is important to understand when CFD commodity trading. In a nutshell, when there is more supply than demand, the value of the commodity will decrease, and vice versa.

What Is Going Long And Short?

Going long when CFD commodity trading is much like purchasing some of a commodity. It is a prediction that the value of an asset will rise. Shorting an asset, or going short, is the opposite and the trade would finish in profit with a fall in the value of the asset – but lose if the asset value rose.

Can I Start CFD Commodity Trading In My Country?

Some countries like the US have banned CFD trading full stop. Whilst other countries may allow it, some only allow certain approved brokers to do these kinds of trades.