8 Best Brokers for Commodity Trading in 2024
Trading is risky and you might lose part, or all, of your capital invested. The information provided is for informational and educational purposes only and does not represent any type of financial advice and/or investment recommendation.
8 Best Brokers for Commodity Trading:
With proper research and knowledge, commodity trading can be a lucrative way to earn additional income.
But before you get started, it’s important to learn what a commodity is, who the best brokers for commodity trading are and how to find the most suitable broker based on your budget and preferences.
Thankfully we have all that information for you right here. Read on to find out more about the best broker for commodity trading.
Best Brokers for Commodity Trading
There are plenty of great platforms for commodity trading, and your choice will depend on several factors. Here we’ll look at options for the best broker for commodity trading, along with a few pieces of information on each of them, including their strengths and weaknesses.
1. Plus500
Pros:
Unlimited demo account, allowing users to practice trading strategies without risk
No minimum deposit
Wide range of assets, including various commodities
Cons:
High commission fees
Limited payment options
Commodities Available for Trading: Plus500 offers CFDs trading in various commodities markets, including agriculture, energy, and metals. However, the specific range of commodities might vary based on market conditions and regulatory changes.
Fee Structure: Plus500's trading fees are built into the spread. They charge no withdrawal fee for the first five withdrawals each month, and there's an inactivity fee after 3 months of account dormancy. The platform also charges a currency conversion fee for trades in a currency different from the account's base currency.
Availability on Mobile or Online Platforms: Plus500 is accessible via its Webtrader platform and mobile apps for both iOS and Android devices, offering a seamless trading experience across different devices.
Ease of Use: Plus500’s platform is user-friendly and well-designed, suitable for traders of various experience levels. However, it may lack the depth and customizability that advanced traders might look for, as it does not support platforms like MetaTrader.
Type of Customer Service Available: Plus500 offers excellent customer support, mainly through live chat and WhatsApp. Although there's no phone support, the service is available 24/7 and is generally quick and helpful.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80% 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.
2. eToro
Pros:
A wide selection of tradable assets
Easy access to fractional trading
The eToro Wallet is a convenient storage solution
Cons:
The spreads on volatile assets are often high
Not optimal for diversifying a portfolio
Inactivity is penalized with hefty fees
Commodities available for trading on eToro: Gold, silver, platinum, palladium, copper, nickel, aluminium, zinc, lead, natural gas, Euro NatGas, EuroOIL, gasoline, heating oil, oil, carbon emissions, wheat, cocoa, corn, coffee, sugar, rice, orange juice, oats, soybeans, soy oil, soy meal, live cattle, cotton and lean hogs. It’s this diverse range that makes many believe that eToro is the best online broker for commodities.
Fee structure: While you can benefit from 0% trading, no exchange and deposit fees for USD and no minimum deposit, you'll pay a $5 fee for withdrawals. Additional fees might apply on non-USD withdrawals and deposits.
Availability on mobile or online platforms: eToro is available for desktops and mobile users and has separate mobile apps for different trading options.
Ease of use: Beginners will find the ease of sign-up and use very convenient. In fact, the interface is more geared toward new traders who don't want to deal with too many customisation options. However, it doesn't give you much control over your trading strategies, so it isn't suitable for advanced professionals.
Type of customer service available: Besides the built-in phone and online customer service, eToro is backed up by a large community of traders and investors. There is also a social media-style News Feed, where you can interact, network and inquire. It’s yet another reason why it is one of the best online commodities brokers.
74% of retail investor accounts lose money when trading CFDs with this provider. Don’t invest in unless you’re prepared to lose all the money you invest.
3. Interactive Brokers
Pros:
Unlimited demo account
No minimum deposit
Wide range of assets
Cons:
Possible high commission fees
Can't pay a deposit with a credit card
Not the best for beginners
Commodities available for trading on Interactive Brokers: These originate from markets like agriculture, currency, energy, equity index, fixed income, metals and volatility futures.
Fee structure: Regular traders will be happy to learn that Interactive Brokers has some of the lowest trading fees and no account maintenance fees. On the flip side, to sign up for an account, you must pay a minimum deposit of $10,000.
Availability on mobile or online platforms: Interactive Brokers has an interface for multiple trading platforms, including web and multiple mobile versions. The latter is available for iOS and Android devices.
Ease of use: The broker operates the highly customisable Trader Workstation (TWS) platform, which you can tailor to your needs. However, after a seemingly straightforward sign-up, beginners might find the TWS platform too advanced.
Type of customer service available: Interactive Brokers offers 24/7 customer support. However, this is limited to phone and email communications, and you won't be able to get real-time help through live chat or an online support system.
4. TradeStation
Pros:
Automated trading platform
Excellent customer support
Access to multiple markets
Cons:
It can be a complex platform
Limited resources
Lack of mobile app features
Commodities available for trading on TradeStation: Metals (gold, silver, copper), energies (crude oil, natural gas, heating oil), agriculture (wheat, corn, oats), meats (lean hogs, live cattle, feeder cattle) and softs (coffee, cotton, cocoa).
Fee structure: TradeStation offers cost-free trading for commodities and other assets (except mutual funds), but there is a minimum deposit of $500.
Availability on mobile or online platforms: Besides the web-based platform, TradeStation also has a mobile app, which not all of the best online commodities brokers have. However, the latter lacks some of the features of the web-based version, which isn't optimal if you want to trade on the go.
Ease of use: Due to the simplicity of the platform coding language, you can sign up in a few simple steps. Not only that, but you can create and test automated trading strategies very easily. The broker also has advanced charting and coding tools for more experienced traders.
Type of customer service available: Given that beginners might need help with navigating the charting tool, it's comforting to know that TradeStation has readily available customer support via phone, email or live chat.
5. Saxo Bank
Pros:
Complex order types and account protection
Over 60,000 trading instruments
A highly regulated (low-risk) broker
Cons:
Educational content is not updated
High minimum deposit
Customisation requires some experience
Commodities available for trading on Saxo Bank: Assets originating from the markets of spot metals, commodity CFDs, commodity futures, commodity options and commodity ETCs.
Fee structure: The broker has a relatively high minimum deposit of $2,200, even for its entry-level (Classic) account. For the Platinum and VIP accounts, the minimum deposit is $200,000 and $1 million respectively. On a more positive note, trading is cost-free (as long as you trade more than 50,000 units per month).
Availability on mobile or online platforms: Saxo Bank's mobile app offers a wide variety of useful tools and functions, and the web-based SaxoTraderGO platform doesn't stay much behind either.
Ease of use: Sign-up is relatively uncomplicated, but customisation takes a bit of experience. The platform lacks predefined layouts that help beginners orient themselves after the sign-up.
Type of customer service available: Long-time traders and newcomers can take advantage of first-class customer support. This can be tailored to your individual needs through the integrated digital support/helpdesk that offers a bank of resources.
6. Pepperstone
Pros:
Almost all the features available in the live account
Fast execution and low spreads
Wide selection of trading techniques
Regulated by 7 regulators, including FCA, ASIC, BaFin
Cons:
Lack of help with some trading techniques
30-day limit to the demo account
High fees on international money transfer
Commodities available for trading on Pepperstone: 17 commodities offered, including coffee, gold, cocoa, silver, cotton, platinum, orange juice, palladium, sugar and more.
Fee structure: There is a minimum deposit of $0. However, there are no deposit, inactivity, conversion or withdrawal fees. The only fee Pepperstone will charge you applies to international wire transfers. The minimum international withdrawal amount is $80 and has a fee that varies depending on the account type (for example, on the popular Razor account, it's $7 per trade).
Availability on mobile or online platforms: Pepperstone is known for using MetaTrader 4, MetaTrader 5. cTrader and TradingView, all of which are excellent web-based trading platforms. The equally customisable MT4 and MT5 for mobile (available for iOS and Android devices) offer versatility and have almost the same functions as the desktop app.
Ease of use: You can sign up for a demo account in a few easy steps. After a trial, you can choose from a variety of accounts to sign up for, including the Pepperstone Standard and Pepperstone Razor accounts, MAM/PAMM, Spread Betting and Professional accounts.
Type of customer service available: The broker provides support through live chat, email and telephone 24/7. This is backed by the extensive FAQ section you'll find on its website, which can answer the majority of users' questions in several different languages.
81.7% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
7. E*TRADE Futures
Pros:
Wide range of products
Low commissions
Experienced support team on hand
Cons:
High minimum deposit criteria
Extra fees
High margin rates
Commodities available for trading on E*TRADE Futures: Coming from a wide selection of products (including agricultural commodities, currencies, energies, metals and financial indices), allowing traders to diversify their portfolio.
Fee structure: E*TRADE Futures has a low trading fee beginning from $1.50 per contract for maximum profit. However, to start trading, you must make a minimum deposit of $10,000. In addition, the platform has a quarterly inactivity fee of $15.
Availability on mobile or online platforms: E*TRADE Futures offers the possibility to trade on both web- and mobile-based programs. Real-time trading is available 24/6 on both the Power E*TRADE platform and the Power E*TRADE app.
Ease of use: Beginners will like the hands-on tools for stocks, options and futures trading for web and mobile platforms. Furthermore, if you're a new trader, you'll find its risk tolerance and market factor tools particularly beneficial for setting up winning trading strategies.
Type of customer service available: E*TRADE Futures has a strong line of customer service. Support is available 24/7 through live chat, phone and email – although some customers have reported that getting resolutions to complex issues or inquiries can take longer.
8. Charles Schwab Futures
Pros:
Diverse range of tradable products
Educational tools for risk management
Particularly well-regarded in the US
Cons:
High minimum deposit required outside of the US
Limited customer support
High inactivity fees
Commodities available for trading on Charles Schwab Futures: Agricultural assets, metals, energies, currencies and several others from different sectors.
Fee structure: While US traders aren't limited by any minimum deposit, non-US residents must pay a $25,000 minimum deposit when opening their account. Another crucial factor to mention: this broker doesn't cater to UK traders. The inactivity fee of $25 applies to all traders who fail to make at least one trade in the quarter.
Availability on mobile or online platforms: If you like to trade on the go, you can stay on top of the markets with the Charles Schwab Futures mobile trading app. It offers the option to monitor opportunities in real time, so you can place trades from wherever you are.
Ease of use: Sign-up is pretty straightforward. After doing so, you'll have access to plenty of valuable instruments, including tools for risk management, stopping loss orders and limiting orders. The additional option for conditional orders is another feature designed to help beginners manage risk and limit potential losses.
Type of customer service available: Unfortunately, Charles Schwab Futures has much to improve on in customer support. The slow response and the lack of availability outside of office hours makes it harder for traders with day jobs to get answers to their questions.
What Is a Commodity?
A commodity is defined as any form of raw material or primary physical product of a process. Some examples of commodities are oil, cocoa, cotton, coffee, gold and lumber. Therefore, commodity trading refers to the market of buying, trading and selling these materials or products.
Besides physical and derivate trading, commodity trading also entails buying and selling futures contracts. Traders aim to profit from expected selling and buying trends, along with arbitrage prospects.
How to Find the Best Commodity Broker
With all these great options, you might be wondering how to find the best commodity broker. Below are a few pointers on how to find the right commodity broker for your needs.
Research Your Options
Commodity trading requires both creativity and scientific methodology. The freshly emerging commodity market is volatile. Before investing any significant amount, proper fundamental and technical research is required. This entails keeping track of all the significant political, economic and international occurrences commodity prices can be influenced by.
Understand Your Skill Level
Certain platforms are better suited for beginners. For example, newbies will find navigating eToro, Pepperstone or E*TRADE Futures much easier than many other brokers. As a beginner, you might also want to opt for trade on a free trial basis. Trading on a demo account can give you a fair idea of how the platform and the market operate.
Know Your Investment Limits
This means researching the platform's fees, too – these can cut into your capital and returns. Choose a broker that caters to your investment limits. Keep track of how much trading you can do without extra expenses. With some brokers, you might be able to negotiate the brokerage rate.
Check User Reviews
While you shouldn’t just pick based on online ratings, it’s a good idea to check what people say, especially in regard to things like customer service. As a beginner, you'll need as much support as you can get. The kind of support a broker offers to current and past users is a good indicator of the support you'll receive after opening your account.
Should You Trade with the Best Online Commodities Brokers?
If you're just delving into the world of commodity trading, you probably aren't sure whether the investment is worth it. Given the risk involved, this is a valid concern for many. However, risks notwithstanding, there are numerous benefits to commodity trading with the best commodity broker. Here are some of them:
A traditional trading option with lots of opportunities – Trading commodities is one of the most well-tried trading options with long-standing traditions and lots of user experience behind it.
Easy to diversify your investments – If you're looking to diversify your portfolio, commodity trading can be one of the best options.
Many available trading platforms for ease of trading – With commodity trading becoming more and more popular, many trading platforms have diversified their offerings to allow for this trading method.
When it comes to risk, know that this applies to any form of investment. As with any other market, commodities are also subject to market volatility, which can result in losses. Inflation is also something you should keep in mind.
During precarious global situations, prices can show sizable variations. Do your due diligence and research the market to make an informed decision about whether to venture into commodity trading.
Frequently Asked Questions
What is commodity trading?
Commodity trading refers to the buying and selling of physical goods such as agricultural products, energy resources, metals or financial instruments that represent these goods, with the goal of making a profit from price fluctuations.
What is a commodities broker?
A broker for commodities is a professional who assists individuals or organisations in buying and selling commodities. They act as intermediaries between traders and the commodities market.
Which broker is best for commodity trading?
The best broker for commodity trading depends on individual preferences and needs. It’s a great idea to check out our commodity brokers list above and see which of these commodity trading brokers is most suitable for you.
How to start commodity trading?
To start commodity trading, you need to educate yourself about the commodities market, understand trading strategies and open a trading account with a commodities broker. It's important to develop a trading plan, set a budget and start with small investments while gaining experience and knowledge.
Which commodity is best for trading?
The best commodity for trading will change from one person to the next. All the seven brokers we’ve looked at here are excellent so you can simply choose the one that most closely matches your needs.
How much one can earn in commodity trading?
Earnings in commodity trading vary greatly and depend on factors such as trading skills, market conditions, investment capital and risk management. It is important to approach commodity trading with realistic expectations and understand that both profits and losses are possible.
How do I select a commodity broker?
When selecting the best commodity broker, consider factors such as commission fees, trading platforms, research and analysis tools, customer support and reputation. Think about what is important to you and find a broker that is the closest match.
How do I become a commodity broker?
To become a commodity broker, you typically need a bachelor's degree in finance, economics or a related field. You may also need to obtain licences or certifications, such as the Series 3 licence.
Is commodity trading riskier than stocks?
Commodity trading and stock trading both carry risks, but the nature of the risks can differ. Commodity trading can be influenced by factors such as supply and demand dynamics, geopolitical events and weather conditions, which can introduce additional volatility.
Is it hard to become a commodity trader?
Becoming a commodity trader requires dedication, knowledge and experience. While it can be challenging, with proper education and experience, you can pursue a career in commodity trading.
What is the safest commodity to trade?
Generally, commodities with high liquidity and stable demand, such as gold or crude oil, are considered relatively safer options. However, even these are not immune from extreme fluctuations.
What is the best commodities broker for beginners?
A great commodities brokerage firm for beginners will offer user-friendly platforms, educational resources and support specifically tailored for those just starting out. While all the options in our commodity brokers list are good for beginners, eToro would be our number one pick as the best online broker for commodities for beginners.
Final Thoughts
As you've seen in this article, there are several outstanding brokers that you can use for commodity trading. Each has advantages and disadvantages, which you should consider before opting for a particular one.
Likewise, evaluate the risks and benefits of commodity trading itself and do thorough research on the market before you start trading. Understanding your experience, skill levels and investing limitations will also help you make an informed decision.