What Are Commodities?
Commodities are raw materials or agricultural products that can be bought and sold, with examples being gold, silver, and coffee. From Copper to corn, coal to crude oil, commodities are central to the lives of billions of people around the world. We are all affected by their price fluctuations.
There are two traditional ways to trade commodities – buying and selling via exchanges, or trading them using derivatives such as binary options, CFDs and spread bets.
Consider buying a Crypto Commodity
GVCX—a crypto/commodity exchange—leverages Digital Asset Collateralized Contracts (DACCs), a model that allows converting your cryptocurrencies into commodities, without having to move money from one wallet to another. The DACCs act rather like a stablecoin whose value can be pegged with a reliable price feed to the value of USD. You can buy and sell gold seamlessly and hold it on your private keys.
What are the most traded commodities worldwide?
By trading volume, the top commodities include gold, silver, US Crude Oil, Brent Crude, copper, and Natural Gas. Products such as coffee, wheat, and sugar are also featured on the list of most traded commodities. Here are some of the major ones to consider:
What is commodity trading?
Crypto/commodity trading can mean two things – buying and selling commodities via commodity exchanges, or trading them via derivatives or cryptocurrencies.
Some commodities are more tradeable than others. For example, markets such as orange juice, oats, and feeder cattle are less liquid– such markets often prohibit speculators from entering or exiting a trade at the point they would like to. An example of a more tradeable commodity is crude oil, gold or coffee.
When trading commodities, speculators should consider factors such as the level of volatility associated with the trade, the aforementioned liquidity of the market, and other factors that influence price movements, listed below.
Why Trade Commodities?
The commodities market is attractive to traders because it can offer:
A Safe Haven
Certain commodities, such as gold, can be a sensible investment in times of market turbulence. This is due to the likelihood of the asset retaining its value—or even increasing in price—during challenging economic conditions.
Profitable Returns
The dramatic swings in commodity prices mean that, with the right knowledge, traders can take advantage of price movements in liquid markets.
A Diversified Portfolio
Broad exposure to commodities can be a good source of portfolio diversification, as they collectively show low correlations with equities and bonds.
Why trade commodities with GVCX?
A unique range of markets
DACCs and other contracts on a wide range of popular metals, energies, and softs
Sophisticated risk management
Use our risk management tools to manage your positions even in volatile times
Lower spreads
Enjoy the best commodity spreads on the market with no insurance costs, including on gold and oil
Increased transparency
Your profit/loss will be clearer over the position’s lifetime, with no need to close on expiry and open a new position
Continuous charting
Take advantage of technical analysis, available as long as you want, and backdated price charts for the last three to five years
Buying commodities with crypto
Enjoy buying as selling commodities seamlessly and hold them in your private wallet
How and where are commodities traded?
Commodities are also generally traded as futures contracts. These are simply agreements to trade an asset at an agreed price and date in the future. This enables you to trade the contracts themselves without ever having to own the underlying asset.
Electronic Intelligence
Pre-Trade and At-Trade Risk Management are performed before trades are created, and at the time of trades, which permits the exchange to cancel, reject, or modify orders and trades, depending on pattern sensitivity settings. It is critical that Pre and At-Trade Risk Management processes run as fast and as efficiently as possible, so as to minimize latency within the exchange matching engine. While it is technically possible to programmatically utilize these functions from external processes or from external matching engines, performance is optimized when the processes are embedded within the actual matching engine itself. Rate limiting of trades can also be managed within this process.
AI Tools
Post-Trade Surveillance is processor intensive, because as the name suggests, processing is performed after orders are matched into trades, therefore Post-Trade Surveillance has absolutely no impact on matching engine performance. For this reason, more complex patterns can be identified during Post-Trade Surveillance as processor intensive machine learning can be fully utilized within this process. Money Laundering — Due to the innovative, proprietary nature of our Anti-Money Laundering system (patent-pending) no info can be provided at this time. The system detects and prevents (pre and at-trade) money laundering attempts.
