HOW TO TRADE COMMODITIES WITH IQ OPTION - OUR DETAILED REVIEW 2019
Many forex traders have some experience trading commodities, especially gold and oil. With IQ Option, traders can trade these two commodities plus corn, copper, wheat, silver, platinum, gasoline, and platinum. (More commodities will be available in the future, though). Let’s see how these instruments can be traded conveniently on IQ Option’s web, desktop, Android, and iOS platforms.
* The commodity CFDs that are available can change from time to time. Some instruments may be removed or added to the list.
- Virtually unlimited profit potential*
- Trades are not subject to expiry
- Minimum investment of $20
- Minimum deposit of $10
- Trade long (buy) or short(sell)
* On successful trades
What are Commodities?
The global commodity market is made up of many types of basic materials and primary agricultural products. Commodities generally fall into two categories, namely hard and soft commodities:
- Hard commodities are not perishable and are natural resources that are mined or extracted. Examples are crude oil, natural gas, gold, coal, silver, palladium, platinum, iron ore, titanium, copper, and uranium.
- Soft commodities are primary agricultural products like orange juice, wheat, corn, cotton, coffee, sugar, rice, soya, lean hog carcases, etc.
Why Trade Commodity CFDs?
Most investors are unable to speculate with physical commodities because they do not have the infrastructure and capital to transport, store, market, and sell it again. However, with commodity contracts for difference (CFDs), even small speculators / traders can partake in the commodity market without the headache of having to handle the physical commodities themselves.
A contract for difference is based on the value of an underlying commodity, which means that a person who trades it, speculates purely on the value of that commodity, without ever taking physical delivery of it. Commodity CFDs can usually be traded with leverage, which means that it is not necessary to put down the entire notional value of a CFD transaction, only a portion of it.
Let’s investigate another advantage of commodity CFDs, and how to trade it on IQ Option’s trading platform:
Profit From Rising and Falling Markets
Commodity CFDs (contracts for difference) can be traded on the long and short side. This enables traders to take advantage of bullish and bearish price movements. To go long, a trader needs to buy the CFD, and to go short, he needs to sell it. On IQ Option’s trading platform, this can be done instantaneously with a single click:
TRADERS HAVE THE OPTION TO TRADE WITH ONE-CLICK EXECUTION OR WITH PRECEDING CONFIRMATION.
If a trader shorts (sells) a commodity and the price moves lower, he will profit from the move lower, just like a trader who goes long (buys) gains from a move higher.
IQ Option Commodity Leverage
Commodity CFDs are available to clients from the European Union and to non-EU clients. The leverage with which these groups can trade it, differ, though. For clients outside of the European Union and pro EU traders, the leverage is up to 1:150. Retail traders from the European Union (not pro traders) have access to leverage of 1:20 on gold and 1:10 on the other commodities. These traders can only use these leverage settings (higher or lower settings are not available).
AN EXAMPLE OF THE COMMODITY SPREADS ON IQ OPTION’S TRADING PLATFORM.
IQ Option’s commodity spreads start from about 0.066%. These are floating spreads that change according to market liquidity, news releases, and other factors.
The different commodities have different trading hours, with some being available for about 23 hours a day, 5 days a week, and others being available for only 4 and a half hours a day, 5 days a week.
Placing Orders Outside of Trading Hours
Traders can place pending orders on commodities, even when the market is closed. These orders can either be executed at the first opportunity (at the first available price) when the market opens, or at a price specified by the trader.
To place an order (when the market is closed) which will be executed at the first available price, select ‘At Opening’:
To place an order at a specific price, enter the price in this box:
Pending orders can also be placed during market hours. A pending order is executed as soon as the price of the particular commodity reaches its level.
Auto Closing Function
The ‘Auto Closing’ function enables traders to attach a stop loss and take profit order to their trades. These are orders which are automatically executed when the price of an asset reaches a certain level. A stop loss protects a trader when the price moves against him by a certain percentage and a take profit locks in gains when the price has gone in his favor and reached a specific level. Here is a screenshot of IQ Option’s ‘Auto Closing’ function:
In this example of a long(buy) trade on gold, the entry price is at 1177.753, the stop loss (red dotted line) at 1158.4 (-246%), and the take profit (green dotted line) at 1236.12 (+743%).
Getting Started: Minimum Deposit and Investment Amount
With a small deposit of only $10, individuals can start trading commodity CFDs with IQ Option. The minimum investment amount is $20.
About Charts, Indicators, Trading Tools, and Other Platform Features...
IQ Option’s commodity CFDs can be traded on exactly the same platform as its other instruments (forex, options, cryptocurrencies, etc.). On this outstanding platform, some of the features you can expect to find are the following:
- A choice between different chart types (candlestick charts, line charts, Heikin-Ashi, and bar charts):
- Different time intervals for bars and candles
- Graphical tools:
- Special widgets (Other Traders’ Deals, Traders’ Mood, and High and Low Values).
- Technical indicators (different moving averages, oscillators, momentum indicators, etc.):
- Video tutorials
- Chats and support
- Market analysis
Practice for Free - Fully Functional Demo Account
IQ Option offers a solid demo account with all the features and trading instruments of a real money account. This demo account does not expire and traders can seamlessly switch between real and demo accounts.
SWITCH BETWEEN REAL AND DEMO ACCOUNTS IN THE BLINK OF AN EYE!
Demo account balances can be topped up at any time, which is also an applaudable feature.
With the different commodity CFDs available at IQ Option, traders can partake in this massive market with the convenience of an excellent trading platform. All the trading tools, indicators, widgets, and other platform features are freely available to all clients. And of course, traders always have access to IQ Option’s customer support team who are available 24 hours a day, 7 days a week.