Indeed, in today’s volatile economic climate that spans the globe, commodities have become a very popular way for traders to earn payouts. After all, commodities, whether they are related to food, energy or metals, are an important part of everyday life and their prices change on a daily basis. In trading, this has a significant implication because each day, the exchange draws money out of one party’s trading account and puts it into another’s so that each party has a daily loss or profit that reflects the market price. Trading commodities in the binary options market has a number of advantages over investing in such assets in the traditional manner including limited risk, substantial cost savings and the ease of trading.
Types of Commodities
Traded commodities can be divided into four categories:
- Energy (including crude oil, natural gas and gasoline)
- Metals (including gold, silver and copper)
- Livestock and meat (including lean hogs, live cattle and feeder cattle)
- Agricultural (including corn, rice, coffee and sugar)
Commodities are also sometimes categorized as hard or soft. By definition, hard commodities consist of natural resources, such as oil and gold while soft commodities include agricultural goods or livestock that must be grown and cared for.
How to trade with commodities and what are the factors affecting their value?
Commodities like gold and oil are popular trading assets in binary options. The reason for this lies in the fact that it can be quite lucrative to speculate on price movements in these markets. The trick is to analyze commodity price movements prior to trading. This can be done in one of two ways- fundamental analysis and technical analysis where fundamental analysis is a study of supply and demand in a market economy while technical analysis is the study of price and price behavior based on the premise that history tends to repeat itself.
At this point, it is also worth noting that commodity markets are very sensitive to events and other occurrences. The top events that can influence the value of a commodity include:
- Surplus- For example, the unceasing production of oil by Saudi Arabia and America has caused the commodity to decrease in value.
- War- When war breaks out near or around shipping ports, the transfer of certain commodities is disrupted.
- Natural disasters- droughts and other weather conditions affect the supply of some commodities.
Trading commodities with BinaryOnline
Trading commodities with BinaryOnline is straightforward. To facilitate an understanding of the more volatile commodity markets, traders are also provided with daily analytical reports from experts. To trade with commodities on our dynamic platform:
- Log into your BinaryOnline account and choose a trading tool.
- Locate Commodities and choose an asset to trade.
- Set an expiry time and choose an investment amount.
- Make your prediction by purchasing a Call or Put option.