How to trade uranium online
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This guide to uranium trading introduces you to the market and explains what you need to look out for. Find out how and where to trade, as well as the key factors that affect supply and demand for uranium.
Compare the best platforms for trading uranium
You can start trading straight away by using one of the brokers below. These are some of the best platforms as chosen by our team of commodities experts. If you don’t want to trade yet, keep reading to learn more.
How to trade uranium online – a step-by-step guide
The basics of trading commodities are fairly simple, so don’t worry even if this is your first time in the market. Use this step-by-step guide to help you get started.
- Find a broker. You need to have an account with a broker to be able to trade. Each platform has slightly different features and fees, so use the table above to pick one that suits you.
- Create an account. To set up an account you need to provide some contact details along with a form of photo ID. A passport or driving licence is fine, and it’s just a way to verify your identity.
- Deposit funds. You can fund your account with a bank transfer or by paying into it with a credit or debit card. Virtually all brokers accept those two payment methods. If you want to deposit a different way, perhaps using PayPal, you need to check your platform’s rules first, in case they don’t accept it.
- Decide whether to go long or short. When you trade you have to choose whether you think a commodity is going to go up or down in price. If it’s the former, then you want to take a long (buy) position, otherwise a short (sell) one.
- Execute trade. Head to your broker platform, search for the uranium market, and hit buy or sell to execute the trade. Now you’ve opened your first commodities position!
- Set stops and limits (optional). Stop-loss and order limits are pre-planned trades that you can set to execute as soon as the price hits a certain level. This is a way of minimising losses if the price goes against you, or guaranteeing profit if it moves with you.
What is uranium? And why does it have value?
Uranium is a radioactive metal that is used to power nuclear reactors and has many other uses. However, the majority of uranium is used by nuclear power stations in generating electricity. Some regions rely on nuclear generated electricity more than others, for example, 75% of all electricity generated in France comes from nuclear power.
Its a valuable commodity for lots of reasons, although growing demand for cheaper and cleaner energy sources has resulted in a bigger need for it. Compared to the worlds most used energy commodities like oil, gas, and coal, uranium is a considerably cleaner and cheaper source of power.
What affects the price of uranium?
Supply and demand are the biggest driving factors behind price movements in the uranium market. However, there are a lot of different things that can impact its both.
While uranium can be found around the world, there are just a few countries that have the largest mines and ultimately have control over its supply. Kazakhstan provides almost 40% of the world’s uranium output. Any decisions made by its state owned miner can have a drastic impact on uranium’s supply and price.
On the demand side the use of electricity can drive the requirement for uranium higher. Nuclear power stations need uranium to produce electricity and when global usage is high, uranium’s demand tends to follow suit. Demand can also be impacted by oil and gas prices, which are more common energy sources. However, if their prices become too high, energy produces look to cheaper alternatives like uranium, which drives up its demand and price.
How has uranium performed in recent years?
Its been experiencing a bullish run for the past few years and since the turn of the decade has seen its price grow by around 140%. More recently its growth has accelerated following Russia’s invasion of Ukraine. Prior to the invasion, uranium futures contracts were trading at about $42. In the few weeks after the start of the war, its price jumped nearly 40%. Although that’s still some way off its all time high price which came in 2007 at $148.
Should I start trading uranium now?
It depends on how you feel about trading with the price experiencing a jump in volatility. Uranium has lots of potential and is widely used by nuclear reactors around the world. Demand from emerging markets shows no signs of abating, so it is likely to become an ever more active market with lots of trading opportunities.
For beginners looking to trade for the first time, however, it might be a good idea to start with other commodities such as oil or gold first as a way to learn how the market works. Commodities can be volatile, and beware of getting stuck in any position where there aren’t enough other traders to sell to if you need to close a position.
A less risky, alternative way to invest in uranium is by buying stocks in companies involved in the production process. These are more stable and are easier to buy and sell whenever you want. If you do decide to invest this way, then keep tabs on our latest market analysis to find the best companies to buy:
Trading uranium for beginners
If you’re new to commodities trading, it can be daunting to know where to start. Follow the tips below to learn how to become a successful trader.
What to do before starting to trade
The path to success starts well before you make your first trade. Here is a list of things to do in advance so that you’re prepared when you enter the market.
- Research the commodity. Learn what makes uranium valuable, who’s most likely to buy it, and what drives changes in its price. That way, you’ll know the signs to look out for once you have started trading.
- Make sure you understand the basics of commodities trading. Commodities are often traded a few months ahead of time using futures contracts. Or you can trade on the current price using CFDs (contracts for difference). It’s important to understand the basics of each one so you can choose a method that works for you. Learn more about the different ways to trade below.
- Decide between long term and short term trading. Are you trying to build wealth over time, or do you want to try to make a quick profit? Your timescale affects how you should trade, and the sooner you want to see returns the more risk you have to be willing to accept.
- Set a budget. Choose an amount you can afford and never risk more than you can safely lose. This also plays into how you should trade, as a bigger budget can give you more options. If you have a smaller budget, it can be best to put it in a stock or an ETF rather than risk it all on a handful of trades.
- Find a broker platform. To make trades or invest in stocks, you need a broker. Choose one that suits your trading style and budget, for example find one with low trading fees if you’re going to be very active.
The different ways to trade uranium
Agricultural commodities are traded in lots of different ways. Below we’re run through all the most popular ways to trade so that you can use the information to make an informed decision about what works for you.
- Spot trading. The ‘spot’ price is today’s market price. The most popular way to trade it is using CFDs, which you use to predict that the price will go up or down by a certain date in the future. This is the easiest way to trade, as it’s just trading on uranium’s value and can be very short term.
- Futures contracts. A futures contract is an agreement to buy a commodity at a set price on a fixed date in the future. Usually they work on fixed time frames, so you can buy a 1-month, 3-month, or 6-month future. The idea is to buy a future if you expect the actual price to be higher in a few months than the agreed price.
- Options contracts. An option gives you the right to buy a commodity at a set price in the future, rather than the obligation to. You essentially put down a deposit to give you the opportunity to buy at a certain price later on. Again with the idea that the actual spot price is more than the value of the option by then.
- Spread betting. Spread betting is a way of predicting market moves by betting your stake per point in either direction. If you’re right, you win your stake multiplied by the number of points moved, while if you’re wrong you lose your stake multiplied by the move.
- Stocks. Buying shares in a company in the uranium trade is a simpler alternative to trading yourself. These companies are usually less volatile, but are a way of tracking the industry’s performance without needing to understand the real nitty-gritty of how it works.
- ETFs. ETFs are exchange-traded funds, and they are funds that own a basket of stocks from within a particular industry or sector. They are publicly-traded, so you can buy shares in an ETF like you would a regular stock. The big advantage is that it gives you an instant portfolio, so you can own a bunch of companies – therefore reducing some of your risk – without needing a big budget yourself.
To learn more about any of these methods, head over to our commodities education section. To start trading right away, sign up with your favourite broker platform.
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