Trade Commodities with CrystalineGroup
There are many key factors to consider both before and whilst one trades commodities. On this page we will touch upon some of the uncertainties encountered when trading, and describe the relationship between commodity markets and other financial markets. We will also discuss the key commodity exchanges and regulators that traders should be aware of.
NOTHING IS CERTAIN
Even in commodity markets with a typically low volatility, there are no "trading certainties". For example, in March 2014, many traders predicted that Brent Crude Oil prices would only continue to increase in value. However, these traders’ forecasts were proved incorrect in the latter part of the same year, when Brent Crude Oil prices saw a dramatic drop in value. Similarly, although a number of OPEC (Organisation of the Petroleum Exporting Countries) officials have publicly stated that they do not believe that oil prices will ever climb back up to over $100 per barrel again, traders should not completely disregard the possibility of this occurring.
COMMODITY MARKETS AND EQUITY MARKETS
The changing values of commodities are able to significantly influence the movement of other markets. For example, a large number of businesses depend on the extraction or harvesting of commodities. Through observing the relevant equities, commodities traders can potentially find themselves in a uniquely advantageous position
One example of this is the effect that oil prices can have on different market sectors. From the late months of 2014 until early 2015, declining oil prices led to the stock prices of many energy companies falling. However, at the same time, many airlines saw profit increases as fuel makes up a large part of airline expenses.
In this instance, those trading oil may have been first to notice its falling prices. Fast-acting commodity traders could have used this information to their advantage by opening positions on equities likely to feel the effects of the falling prices.
KEY COMMODITY EXCHANGES AND COMMODITY REGULATORS
Commodities are traded on international commodity exchanges. The largest exchange in the US is the Chicago Mercantile Exchange & Chicago Board of Trade, also known as the CME Group. The CME group owns and operates major options and futures exchanges in Chicago, and New York - such as the New York Mercantile exchange - in addition to online trading platforms. China, India and Japan are also home to large commodity exchanges.
A range of organisations exist to regulate commodities trading. In the US, the main regulatory body is the Commodities Futures Trading Commission (CFTC). The principle regulator in Continental Europe is the European Securities and Markets Authority (ESMA). In the UK, the regulation of commodities trading is conducted by the Financial Conduct Authority (FCA).
COMMODITIES TRADING WITH CrystalineGroup
Select Your Trading Format When it comes to Commodities Trading, CrystalineGroup offers its clients a choice on many products; between "rolling daily" and "futures" formats.
Large Range of Choice From Cocoa, Copper and Crude Oil to Silver, Sugar and Soybeans, CrystalineGroup offers a comprehensive range of commodities trading opportunities
Available on Two Different Platforms CrystalineGroup offers commodity trading via the CrystalineGroup TraderPro and CrystalineGroup MT4 platforms
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