Compare the best commodity brokers & trading platforms
What are the best commodity trading platforms?
If you’re ready to start trading commodities online right away, then the table below contains all the top online brokers. All you need to do is choose a trading platform and follow the link. If, however, you want some more information about commodity trading before signing up, scroll down and keep reading.
What is a commodities broker?
A commodities broker (or commodity trading platform) is a service that acts as a middleman for the buying and selling of commodities. Commodities are raw materials such as gold, silver, and oil, and brokers allow users to trade these materials with each other in a variety of different ways.
How do commodity brokers work?
Online commodities brokers work by making trades in the commodities markets on the behalf of their users. As a registered user of a broker, you will be able to give details of the trades you would like to make and the trading platform will execute those orders for you, applying a small fee or commission for the convenience.
What’s the difference between a commodity trading platform and a stock broker?
The only difference is the asset being traded: commodities brokers allow you to trade materials such as palladium, whereas stock brokers facilitate the trading of stocks and shares of major companies such as Apple and Tesla. It is common for brokers to offer a range of services, however, and it is thus possible to find trading platforms that are both commodities brokers and stock brokers if you want to trade in a range of markets.
How do I use a commodities broker?
Using a commodities broker is a straightforward process, requiring simply that you register with the broker’s platform or app, fund your account, and navigate to the trading interface. Here you’ll be able to see all the commodities available to trade, usually with the following options:
- Futures contracts. Commodities are traded ahead of time, as they need to be mined/farmed/extracted etc. Futures contracts are agreements to buy a given amount of a commodity at a set price on a specific date in the future; they are commonly used when trading commodities.
- Options contracts. An options contract gives a buyer/seller the option to buy or sell a commodity at a set price before a specified date. Unlike with a futures contract there is no obligation to make the trade, and you can have both ‘put’ options (which allow you to sell at a certain price) and ‘call’ options (which allow you to buy at a certain price).
- CFD trading. Many commodities trading platforms are also CFD brokers. These platforms allow you to trade commodities using Contracts for Difference (CFDs), meaning you don’t agree to buy or sell any commodities directly – instead making trades against their value as prices fluctuate.
- Spread betting. Similarly to CFD trading, when spread betting commodities you’re not buying and selling them in the form of contracts, but instead making bets on whether their price will rise and fall. The best spread betting brokers allow you to use this technique to speculate on commodities prices at speed and with leverage, with the broker profiting via the margin between the buy and sell prices.
The best commodity trading platforms for beginners, traders, and long-term investors
Which commodity broker is right for you will depend in large part on your investment strategy and your level of trading experience. We’ve broken down the top online trading platforms for the three main user profiles to help you find the best broker.
The top broker for beginners
If you’re just starting out, then you want to prioritise finding a commodities trading platform that makes buying and selling commodities as easy and hassle-free as possible.
The top platform for day-traders
For day traders looking to make frequent commodities trades, it’s best to go with a reliable CFD trading broker that offers low fees and good leveraged trading options.
The top app for long-term buyers
Some people look at commodities as a long term investment prospect – particularly when it comes to precious metals. If you’re looking to keep hold of your commodities, you want a broker or commodities dealer you can trust to give you good rates.
What should I look for in a trading platform?
With all the best online commodity trading platforms offering a good service to their users, it’s helpful to compare them on a few key metrics to find the right broker for you. Here’s a quick summary of what to consider when making your choice.
Design and ease of use
The point of brokers is that they make it easy for regular people to trade commodities. You don’t want a platform to make the process confusing, as this could lead to you missing out on timing your trades right, or even making costly mistakes because of bad design.
Especially if you’re new to trading, find yourself a commodity broker that allows you to start out with a free demo account. This means you can make trades in real time but with fake money – allowing you to learn the ropes and protecting you from losing any money when you’re still getting to grips with online commodities trading.
It almost goes without saying (but is still worth reiterating) that you want a broker to charge the lowest fees possible for placing trades. The lower the fees, the more of your money can be used for trading in the commodities markets.
One thing to look out for is the spreads being applied by a broker (the difference between the bid and ask price). Be especially attentive to this if a broker advertises itself as having ‘zero fees’ – as this means they are likely concealing the true cost of trading by applying higher than average spreads.
Not every broker accepts every payment method, and sometimes even the best commodities trading platforms will apply fees for funding your account in certain ways. This is most common when making deposits with credit cards or PayPal.
Reputation and regulation
When trading commodities, you should make sure you’re using a regulated broker with a strong reputation. It’s a good idea to have a read through our in-depth reviews of each broker, and also to look around the internet for user reviews, before signing up.
Number of commodities available to trade
The range of commodities you can trade will vary from broker to broker, so be sure to check what the trading platform offers before registering. The different types of commodities include agricultural products such as beef and wheat, precious metals such as gold and platinum, and energy sources such as oil and natural gas.
How to trade commodities on each broker might be slightly different. We have outlined the usual methods used of trading commodities further up this page, but you will find that not all trading platforms allow you to spread bet commodities, some may have different limits and leverage offered for CFD trading, and more comprehensive platforms might allow you to trade other assets such as stocks, forex, and cryptocurrencies.
Quick answers to key questions
Do brokers charge commissions or fees for trading commodities?
Yes, commodity trading platforms will apply charges for trading activities undertaken on their websites or apps. These fees may come in the form of small commissions applied for each trade placed, overnight fees for CFD positions carried across to the next day, or spreads between the bid (buy) and ask (sell) price of each commodity.
Do I have to verify my identity with a commodity trading broker?
Yes, online commodity trading brokers require you to provide ID when signing up to their platforms. This is in order to comply with KYC (know your customer) guidelines and prevent platforms from being used for money laundering. Usually at least one form of photo identification is necessary for using a commodity broker.
Can I trade multiple commodities with a broker?
Yes, brokers will allow you to trade a wide range of commodities. The best commodities trading platforms will give you access to every different commodity market and allow you to trade in a variety of different ways.
Do I need any extra software to use a commodity broker?
Not usually, no. Online commodity trading platforms tend to allow you to place all of your trades through their websites or mobile apps, with all trading data kept within your account. If you want to use other popular software such as Meta Trader 4, however, then many top commodities brokers will also allow you to integrate this with their platforms.
Should I use a broker to trade commodities?
If you’re looking for a reliable way to trade commodities online, then brokers are the best option. You could consider using a commodities dealer if you simply want to buy gold, silver, or other precious metals as part of a wider investment strategy, but for a larger number of options it’s best to use a commodity trading platform.
If you’re still considering whether trading commodities using a broker is for you, then consider the following pros and cons, along with the additional information and FAQs at the bottom of the page.
- You can trade a wide variety of commodities with online brokers
- CFD brokers often allow for leveraged commodity trading
- Some brokers also allow you to trade stocks, forex, and cryptos
- Generally commodity brokers charge low fees
- The best commodity trading platforms have great customer service
- Some platforms support spread betting commodities
- You need to understand the different ways commodities are traded
- No-one is guaranteed to make a profit when trading commodities
- Trading with leverage comes with increased risk
Should I trade commodities now?
If you feel you understand how commodities trading works and want to try it out, then it’s a great time to sign up to one of the top 10 commodity brokers and make some trades.
When trading commodities, however, it is important to keep on top of all the recent news that might affect the markets. Some commodities, such as gold, are regarded as ‘safe havens’ during times of economic turmoil as they typically retain value even when other assets are falling, but agricultural and energy commodities don’t usually follow the same pattern. Have a read of the most recent features from our experts below to stay informed.
Crude oil, Gold, Silver price analysis roundup
Brent crude oil prices hit 13-month highs as BofA raises outlook
Here are two drivers that could send oil prices higher, according to JP Morgan analysts
Where can I learn more about commodity trading?
Right here on Invezz. We have a variety of commodities courses to help you learn everything you need to know about commodities trading before signing up to a trading platform.
You will be able to access your online commodities broker at any time, but commodities markets aren’t open 24/7. They are, however, open for much longer hours than stock markets, so as long as you’re not trying to trade in the middle of the night you’ll likely be able to complete your commodity trades.
Yes, there is no reason you can’t sign up for multiple commodity trading platforms. Usually it is a good idea to find a broker you like and to place all your trades on that platform, but there might be good reasons for using more than one service. For instance the broker you usually use for trading might not allow you to spread bet commodities, and so if you want to do this you’ll have to use another service.
You’ll be able to retrieve a lost password by simply clicking the ‘forgot password’ option on the login screen of your online commodity broker. The platform will then send you an email link you can use to reset your password.
Yes, and many commodities brokers have dedicated mobile apps to make this as easy as possible. Even if your broker doesn’t have a mobile app, you’ll be able to make trades on your phone by simply logging in using your mobile browser.
‘Soft commodities’ is the term usually used to refer to commodities that are grown. They include agricultural commodities such as wheat, coffee, sugar, and cocoa.
‘Hard commodities’ are commodities that need to be mined or extracted from underground. They include oil, coal, silver, and gold.
Not all brokers are regulated, but all the best commodity brokers are regulated by recognised financial bodies. This means your funds are protected in case something goes wrong with the broker; it is unsafe to trade with an unregulated broker and we don’t recommend it.
To spread bet commodities means to gamble on whether the price of a commodity will rise or fall. Unlike when trading using CFDs, which represent the virtual ownership of a commodity and can be traded against the asset’s value, spread betting is just adopting a position on what direction you think the price will move – just like betting on a football game.
Yes it is possible to sell commodities short on certain commodity trading platforms. This means to try and profit from a commodity falling in value by selling it at a high price and buying it after its value (hopefully) falls.
It depends on how you plan on trading commodities, but usually yes. Most activities related to commodities trading will require you to pay capital gains tax in the UK, but this doesn’t necessarily apply to profits made through spread betting. In other countries this varies so check the law where you are.
No, online commodity trading platforms are not anonymous. When you register for a broker you will have to provide certain pieces of identification, usually including a photo ID such as a passport or driving license.
If the broker supports PayPal as a withdrawal method then yes, but this isn’t offered by every broker. If you want to trade commodities with PayPal, then use our comprehensive reviews to find a platform that will allow you to do so.
Yes, all you have to do is follow these steps:
- Close all your positions
- Withdraw your funds
- Open an account with your new broker
- Deposit funds
- Start trading commodities
Yes, in the UK it is legal to trade commodities online. This might not be the case in all countries and jurisdictions, however, so be sure to check the law in your home country before starting to trade.
It depends on your trading goals. We have outlined the 4 main ways to trade commodities at the top of this page, and CFD trading is a great option if you want to make frequent trades as the commodities markets rise and fall. However, it is not so well suited to more long term investment approaches.
Each broker will have set limits on how much a user can trade – usually in the form of daily or weekly limits. However, these limits are usually very high (in the £10,000s each day) so will not be applicable in case you’re placing large commodity trades frequently.
- 1. Compare the best commodity brokers & trading platforms
- 2. What are the best commodity trading platforms?
- 3. What is a commodities broker?
- 4. The best commodity trading platforms for beginners, traders, and long-term investors
- 5. What should I look for in a trading platform?
- 6. Quick answers to key questions
- 7. Should I use a broker to trade commodities?