A commodity is a basic physical asset, traded on financial markets in the form of futures. Instead of having to trade on a futures exchange, you can use a derivative like a CFD to trade a huge variety of commodities, from popular markets like oil and gold to niche ones like carbon emissions, orange juice and rough rice.
You can use an IG CFD to trade commodities as futures, with a fixed expiry and all funding charges included in the initial spread. Alternatively, for 26 key markets, you can trade commodities without expiries. This allows you to take a short term view, paying a funding charge each time you hold your position overnight. It also means you can keep a position open indefinitely.
An individual commodity contract will be equivalent to a set amount of cash per point of movement in the commodity, priced in its base currency. For metals trades, that means that a single contract has an equivalent amount of metal: a single gold CFD, for instance, is the equivalent to 100 troy ounces of gold. Mini contracts are also available.
Find out more about commodities trading with IG Bank