Most of the commodities are traded on futures contracts. These contracts are operations that you can buy or sell commodities at a specified price. In this way, you don’t need a specific space to store physical commodities, such as several hundred barrels of crude oil or several thousand tons of gold.

Commodity traders generally have one of the following three characteristics:

Hedger: as the trend of commodities is often the opposite or unrelated to the trend of other investment products, traders often buy or sell commodities to help manage risk.

Speculators:traders who hold views on specific commodities and are willing to take corresponding risks for profit.

Broker:a company or an individual that executes an order to buy or sell commodity futures contracts on behalf of a trader.

The trading of commodities uses leverage to magnify the amount of investment. Different products have different leverages. At present, the highest leverage for commodity trading is about 1:130. For example, investing $100 can make a transaction worth $13,000. Risk management in the commodity trading is very important. High leverage can increase your profits, but can bring significant losses as well.

For the commodity trading, there is no difference between the bull and bear markets. The commodity trading offers traders the opportunities in both bull and bear markets.

Futures market and spot market are two independent markets, but they will be affected by the same economic factors, so they have the same price trend. Therefore, traders can trade in opposite directions in the two markets respectively, to use their profits earned in one market to make up for their losses in another market, and then achieve a hedge. For example, if the current price of gold falls, contracts for gold futures can add value.

Commodity traders basically do not charge any transaction fees and only profit from spreads. In the commodity market, the spreads offered by the TREX GLOBAL are at the lowest level in the industry, with gold spreads as low as $ 0.26 and crude oil spreads as low as $ 0.036. Click herefor specific charges.

Initial Margin refers to an amount of money required to be paid by a trader when placing an order.

Day Trade Margin refers to the margin amount the customer must have during the trading hours. If they do not, they will be required to offset the position.

Weekend Margin refers to the margin amount the customer must have to carry the position overnight. If they do not, they will be required to offset the position.

A spread refers to the difference between the bid and ask prices. For traders, the smaller the spread, the lower the cost to trade.

In the long run, the spread can greatly affect the general profits or losses of day traders, but have little impact on that of the mid-/long-term traders.

A commodity quote only has two prices: one is the selling price (also known as the bid rate) and the other is the buying price (also known as the selling rate, sometimes called the asking price). A spread refers to the difference between the bid and ask prices.

The calculation mode is provided as follows:

Gross profit or loss = (ASK-Bid) × contract unit × traded lots + overnight interest (if any) - commission (if any).