Company Information:

This website (www.excentral.com/eu) is operated by Mount Nico Corp Limited, a Cyprus Investment Firm, authorized and regulated by the Cyprus Securities and Exchange Commission with CIF license number 226/14. The company is located at Agiou Athanasiou, 66 Toumazis Linopetra Building 4102, Limassol, Cyprus.

 

Mount Nico Corp Limited owns and operates the “eXcentral” brand.

 

Risk Warning:

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79.92% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Past performance does not constitute a reliable indicator of future results. Future forecasts do not constitute a reliable indicator of future performance. Before deciding to trade, you should carefully consider your investment objectives, level of experience and risk tolerance. You should not deposit more than you are prepared to lose. Please ensure you fully understand the risk associated with the product envisaged and seek independent advice, if necessary. eXcentral does not issue advice, recommendations or opinions in relation to acquiring, holding or disposing of any financial product. Mount Nico Corp Limited is not a financial adviser and all services are provided on an execution only basis. Please read our Risk Disclosure document.

 

Regional Restrictions:

Mount Nico Corp Limited offers services within the European Economic Area (excluding Belgium) and Switzerland.

 

Mount Nico Corp Limited does not issue advice, recommendations or opinions in relation to acquiring, holding or disposing of any financial product. Mount Nico Corp Limited is not a financial adviser and all services are provided on an execution only basis.

Commodities

What is a commodity?

A commodity is a raw material or agricultural good that can be bought and sold, and can be standardized in terms of quantity and quality. This makes commodities fungible, which means one unit of a given commodity is considered to be the same as another unit, regardless of who the producer or grower is. Commodities tend to be split up into the industrial commodities such as metals and energy products, and the agricultural commodities that include grains and other crops or animals that are in high demand. Commodities are one of the major asset classes, and in addition to being bought and sold for use in industry and commerce, they are also a vehicle for traders’ speculation.

How to trade commodities?

Traditionally commodities have been traded on the futures exchanges, where producers and consumers of the various commodities come together to agree on future pricing for the commodities. Producers do this to lock in prices and guarantee gains, while consumers will use futures as a hedge against inflation. Buying and selling futures requires a large amount of capital, and there is the danger of a futures contract expiring and requiring the holder to take physical possession of the commodity.

More recently however, a new way of trading called Contracts for Difference has emerged, and now retail traders can also speculate on the price changes of various commodities without the trouble and expense of trading on the futures exchanges.

Popular commodities

There are a number of popular commodities, but by far the most popular among retail traders is gold. Its sister metal silver is also quite popular, as is crude oil. These are the major industrial commodities. Other popular industrial commodities include copper and platinum. In addition to the industrial commodities there are also agricultural commodities that are popular with traders. These include soybeans and corn, as well as more exotic commodities such as coffee and cocoa. In general, commodities are popular because they tend to have strong trends.

Metals and Energies

The industrial commodities are composed of the metals complex and the energy complex. Both include a number of popular and highly lucrative commodities. The metals include two of the most popular commodities by far – gold and silver. Other metals that see a lot of trading action are copper, platinum, and palladium.

Energy contracts are also popular and heavily traded. The energy complex includes such commodities as crude oil (both the global benchmark Brent crude and the U.S. benchmark West Texas Intermediate crude), gasoline, natural gas, and heating oil. Retail traders typically focus their attention on crude oil, although some will trade in the other energy products.

Benefits and Risks

Commodity CFD trading has a number of benefits, among them the ability to go long or short with equal ease. Also of benefit for commodity traders is the tendency for commodities to have strong trends. This allows trend-following strategies to be more successful than with other asset types. And commodity traders are also able to take advantage of leverage, which can help them manage their capital more efficiently.

That leverage also poses a risk for commodity traders since it can magnify any losses that are sustained. Another risk that can surprise some traders is the potential volatility in the commodity markets. All it takes is one negative event, or even some potential news to create a larger than expected move in commodity prices. That can come from the weather, geopolitical events, economic data, or a host of other fundamental sources. Another very real risk that few new traders consider is inexperience. There are very specific conditions that move most commodity markets, and a lack of experience could mean you miss one or more of these factors, putting your capital at risk.

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