Commodities are among one of the most popular assets traded on the financial markets. When most people think about this asset class they commonly think of the two most popular assets in this class, gold and oil. These are probably the two most well known and familiar to most people.
However there exists a much wider range of assets in this class. However up until now they have not been easy to access for the retail trader. While gold and oil have yielded stellar returns over recent years, so too have cotton, wheat, sugar and coffee. Now retail traders can gain access to trading these with low capital amounts.
With the increasing popularity of binary options it is has now become much easier to trade a wider range of commodities. This is because when trading with binary options, an investment is not made in the asset itself. Instead the contract is made between the trader and their broker. This gets around the high minimum entry requirements that many of these assets have for investment purposes.
The structure of binary trading means that virtually any asset that a binary options broker wants to offer to its clients can be traded. As traders have become more sophisticated, so too has the range of assets that brokers are offering to their clients.
Like all binary options contracts there is little in the way of a barrier to entry. You can trade these assets from just small dollar deposits; in many instances you can take a position from just a few dollars. This has also helped to make this often difficult to access asset class available to investors at all ends of the spectrum. Both high and low net worth traders can try their hand at making profits from these markets.
It should not be forgotten that online trading of these markets is not without risk. The retail trader is at the mercy of the markets and can find themselves out of pocket if they don’t know what to expect.
However direct access to the commodity markets has the effect of helping to diversify trading. Now for the first time is possible to offset positions across multiple asset classes to lower your exposure to any one particular market. Traders in the retail environment can now take positions on a range of assets and hedge their positions to diversify and protect their existing holdings.
The range of commodities that you can now trade is huge. You can trade both hard and soft commodities including many food commodities such as wheat, coffee, rice and corn. While these tend to have quite volatile moves in price it does mean that there are plenty of opportunities for binary options trading. This is ideal for the short term intraday trading.