Commodities are basic to our daily life, which makes the commodity futures markets among the largest, with huge trading volumes. Binary options and spreads give you a different way to trade commodities—with limited risk and a lower cost of entry. You can never be stopped out or get a margin call.
We offer binaries on these metals, energies and agricultural products:
Metal: gold, silver, copper
Energy: crude oil and natural gas
Agricultural: corn and soybeans
In 2014, the price of crude oil fell by more than half. Oil-dependent economies like Russia’s suffered, while consumers enjoyed lower gas prices. Volatility was widespread. Most traders are not prepared or lack the capital to trade commodity futures alongside the big players, especially when things are volatile. With our binary options and spreads, you trade commodity futures prices with smaller risk. You set your maximum possible loss before you enter the trade. If the market spikes against your position, your loss is limited and you won’t get stopped out even if your binary's value goes to zero. With our binary options and spreads, you can exit the trade prior to expiration, to take profits or avoid taking the maximum loss.
The U.S. commodities markets are in Chicago, New York, and Atlanta. The CME Group owns all but one. The Chicago Mercantile Exchange focuses on agricultural commodities, while the Chicago Board of Trade specializes in grains. The New York Mercantile Exchange focuses on energy and metals. The Commodity Exchange is located in New York, although the Chicago-based CME Group owns it. The Atlanta-based Intercontinental Exchange now owns the New York Board of Trade. It trades mostly in the softs markets. In 1975, the Commodity Futures Trading Commission began regulating commodities. The Commission replaced the Commodity Exchange Authority and the Commodity Exchange Commission. In 1936, the Commodities Exchange Act had established those bodies to administer the Act and to set federal speculative position limits.
Commodities trading especially impacts lower-income people around the world, who pay more of their limited income on food and transportation. It also makes farming riskier. It's one reason why the U.S. government provides farm subsidies.
A significant amount of trading occurs in oil, gold, and agricultural products. Since no one wants to transport those heavy materials, they trade futures contracts instead. These are agreements to buy or sell at an agreed-on price on a specific date. Commodities contracts are priced in U.S. dollars. So, when the dollar's value rises, it takes fewer dollars to buy the same amount of commodities. That makes commodity prices fall.5
Financials are also traded in the futures markets. These include currencies such as the 3-month Eurodollar and the euro FX. It also includes interest rates, such as the 10-year Treasury note. There are also futures on stock indices such as the S&P 500. But the Commodity Exchange Act doesn’t define these as commodities.