Investing in commodities
Investing in commodities is becoming increasingly popular. In the past, only professional investors could invest in commodities such as oil and gold. However, with the advent of online brokers, anyone can take advantage of fluctuations in the commodity markets. This article explores how you can benefit from trading the commodity markets.
How can you invest in commodities?
There are several ways you can invest in commodities. We discuss the different ways for trading commodities in this section.
Active speculation in commodity pricing
If you want to invest in precious metals such as gold and silver, it is possible to purchase a fixed amount. This becomes more difficult with commodities such as oil and grain, because these materials are only traded in large quantities. Thanks to the advent of CFD brokers, it is now possible to speculate on the price of commodities as a private investor without being responsible for the storage of the commodity.
But how does trading in commodities work when you use CFDs? With CFDs, you can speculate on commodities’ price increases and drops. Thereby, you can respond perfectly to the latest market developments. eToro is a great option to try trading commodities. At eToro you can try CFD trading in commodities for free and without risk by using an unlimited demo. Use the button below to open a free demo account:
Investing in commodities through ETFs
You can also choose to invest in commodities long-term. ETFs or Exchange-Traded Funds are suitable for this. ETFs are funds that track, for example, the price of one or more commodities. Some examples of EFTs are:
- iShares Silver tracks the price of silver
- GLD Gold tracks the price of gold
- USO-Oil Fund tracks the price of oil
It is easy to buy and sell these types of Investment Funds through a broker. Would you like to know through which brokers it is cheapest to invest in commodities? Click the button below to compare the best commodity brokers:
Indirect investment in commodities through shares
It is also possible to choose a less direct approach. You can purchase shares in companies handling a certain raw material. Some examples of this are:
- You can invest in gold by purchasing shares in a goldmine.
- You can invest in oil by purchasing stocks in an oil company.
- You can invest in sugar by purchasing shares in a candy company.
Note that this means you are making an indirect investment in commodities. The stocks’ results will depend on the companies’ performance. Under improper management, a company dealing in gold can perform poorly even when the price of gold is rising. Therefore, it is in your best interest to thoroughly research a company before investing.
Would you like to learn how you can buy shares? In our article regarding stock purchasing you will find all pertinent information:
Direct investment in commodities
In some cases, you can choose to simply buy commodities. This is not very practical with oil or grain, but with precious metals, such as gold or silver it is possible. The cost of purchasing commodities are often higher, and you must take such things as storage- and security costs into account.
What kind of commodities can you invest in?
There are different kinds of commodities in which you can invest. In this section we discuss the most popular commodities to invest in.
Energy related commodities
The oil price is often dependent on economic development. When the economy is doing well, more energy is needed. Therefore, the price of oil can rise dramatically. Oil is one of the most traded commodities.
Precious metals are also popular with investors. Precious metals are metals on which rust has a limited effect. Well known precious metals in which you can invest are gold, silver, copper, and platinum.
Gold is often seen as a safe investment. Investors buy gold when financial markets perform poorly. However, precious metals often have other functions as well. For example, silver and copper are often used for technical applications.
There is also a lot of speculation in the prices of agricultural products. Derivatives allow farmers to protect their products from falling prices. Popular agricultural products in which you can invest are, for example, coffee, corn, cocoa, sugar and cotton.
The demand for agricultural commodities is largely dependent on supply and demand. When crops fail, the supply could drop; prices can then rise in response. When the economy is strong, the demand for agricultural products increases. This can also drive up the price of these types of commodities.
You can also choose to invest in chemicals. Chemical elements cannot be found in nature. Therefore, these commodities must be made synthetically. Examples of such chemical metals are uranium, lithium, and cobalt. When the economy is strong, you often see an increase in the demand for these kinds of commodities.
Why do people invest in commodities?
Investing part of your money in commodities can be attractive. Commodities are of interest to the active trader because the push and pull of supply and demand ensures that the price fluctuates constantly. If you play your cards right, daytraders can make a tidy profit on this.
However, purchasing commodities can also be interesting long term. Unlike companies, commodities cannot go bankrupt. The supply of commodities is finite, while the demand will only increase over time. When you have enough patience, you can achieve a solid return on an investment in commodities.
How is a commodity price determined?
Commodity trading works just like stock trading. Supply and demand determine the price of a commodity such as gold. When there are more buyers than sellers, the price increases until a balance between the number of buyers and sellers is found.
Many speculators are active in the commodities market. As a result, the price of a commodity can sometimes move in a surprising direction.
The usefulness of derivatives
Investing in commodities is almost always done through derivatives such as CFDs and futures. These derivatives have a useful function in the economy. Many companies depend on certain commodities. For example, they need copper to produce phones. If the price rose too much, it would jeopardize the profitability of the company.
With a derivative, a company can then prevent the price from rising too much. The derivative ensures that the company can buy the commodity at a fixed price. Derivatives can therefore be used by companies to limit the risks within the commodity market.
Commodities are scarce
Many commodities are scarce; this makes them an attractive investment. In the short term, prices will fluctuate sharply, but once supply eventually falls, prices will rise sharply due to unchanged demand. Commodities often react strongly to economic developments and can therefore be quite volatile. This makes it advantageous to invest in commodities in the short term.
In the category investing in commodities you will find several interesting articles that discuss the characteristics of commodity investing.
Try trading risk free?
How to invest in coffee (2023)? – coffee stocks & ETF’s
Many people start their day with a cup of coffee. Did you know that after oil, coffee is the most traded commodity in the world? But how can you invest in coffee? In this article, I will extensively analyse the coffee market & you will learn everything you need to know about investing in coffee stocks.
How to invest in coffee?
There are several methods you can use to invest in coffee. You can choose to trade directly in the commodity price. It is also possible to buy stocks of companies that are active in the coffee sector. Finally, you can invest in a fund (ETF) that invests in coffee.
Option 1: Buy coffee stocks
Various companies are active in the production and sale of coffee. However, not all companies are purely dependent on the price of coffee. For example, Smuckers is known for jam, but also owns the coffee brand Folger’s. Nestlé also earns a fair amount of money from coffee, but also sells many different products.
Therefore, it is important to research what the company is involved in before you invest in a coffee stock. Research whether the company has a good future perspective and examine its financial status.
Are you curious about where to buy the best coffee stocks? Take a look at the overview below:
|Buy coffee without commissions. Your capital is at risk. Other fees may apply.|
|Speculate with CFD's on increasing & decreasing prices of coffee! 82% of retail CFD accounts lose money.|
|Benefit from low fees, an innovative platform & high security!|
|Speculate on price increases and decreases of coffee with a free demo!|
Option 2: Actively speculate on the price of coffee
It is obviously impractical to order coffee bags to your home as an investment. Buying coffee at the local supermarket is also not feasible. Fortunately, there are more practical methods you can use to invest in the price development of coffee.
You can invest in the price of coffee by using derivatives. Derivatives are contracts on, for example, a commodity where you only trade in the underlying price and not in the commodity itself. The actual commodity will never be delivered to you.
With derivatives, you can speculate on both rising and falling coffee prices. However, be aware that speculation is always risky, and you can lose a lot of money quickly. Do you want to try online trading in coffee for free with a demo? Click on the button below to open a demo directly:
Option 3: Invest in coffee funds or ETFs
You can also choose to invest in coffee through a fund or ETF. Examples of coffee funds are:
- WisdomTree Coffee (COFF): this ETC tracks the Bloomberg Coffee Subindex.
- Dow Jones-IBS Coffee ETN: this fund tracks a coffee future and automatically rolls over to the next period.
- Pure Beta Coffee ETN: the contracts do not roll over automatically. The fund makes decisions based on price fluctuations.
Do you want to know more about investing in coffee through ETF’s? Then refer to our special about investing in ETF’s:
Option 4: coffee futures
I would never recommend futures to beginner investors. With futures, you are obligated to take delivery at the end of the contract. If you are unable to sell the contract, you could suddenly end up with a large amount of coffee.
One future has an underlying value of 37,500 pounds (ca. 17 t) of coffee. This means that you need a considerable amount of money to invest in coffee through futures.
Why can investing in coffee be interesting?
Reason 1: coffee is a staple product
Many people view coffee as a staple product. Therefore, there is still high demand for coffee even in economic downturns. In many parts of the world, coffee is seen as the perfect drink to start the day. As a result, demand for coffee does not decline as quickly during economic downturns.
Reason 2: rising global consumption
There are more and more people worldwide who can afford to buy extra products. In emerging economies such as China and India, coffee consumption is on the rise. If we follow economic trends, it appears that these regions will only become more prosperous. Worldwide coffee consumption is therefore increasing by an average of about two percent per year.
Reason 3: relatively transparent
Because coffee is a physical product, it is easier to understand how supply and demand affect each other. Many investors therefore have a more profound understanding of how the price development of coffee works than the price development of a specific stock.
Reason 4: price fluctuations for speculation
The price of coffee can fluctuate significantly. In 2011, a price of over $280 was reached, while in 2020 the price dropped to $100, only to rise above $200 again in 2023. Smart traders know how to take advantage of these kinds of fluctuations. For example, with a short position, it is possible to speculate on a declining price.
Reason 5: protection against inflation
Investments in commodities such as coffee can protect you against inflation. Money in your bank account decreases in value over time. However, commodities rise with general price increases. In addition, by investing in coffee, you can apply further diversification to your investment portfolio.
Reason 6: coffee as a ‘luxury product’
Coffee is part of the work culture. Research indicates that people drink more coffee when they are at the office. You also see that the new generation drinks more luxurious ‘organic’ coffees. When the economy performs well, demand in these segments might even increase further.
How is the price of coffee determined?
The price of coffee is determined by the interplay of supply and demand. When there is suddenly a lot more coffee available due to good harvests, this can push down the price. At the same time, the increasing global demand can cause the price to rise further.
The price of coffee often drops significantly when there is overproduction. In good years, the market can suddenly be flooded with large amounts of coffee. Moreover, the working conditions for coffee farmers are improving, which makes it more attractive to switch to coffee cultivation.
The exchange rates of the pound and the dollar also play an important role. Coffee is traded on the London and New York stock exchanges. When you buy coffee in a different currency, the exchange rate plas a large role in determining your outcome.
2 types of beans
In most cases, you invest in the largest and most well-known type of coffee: Arabica coffee. 70% of the trade is related to this type of coffee. The remaining 30% consists mainly of Robusta coffee beans. It is cheaper to produce these beans, but the quality is also somewhat lower. The type of coffee you trade in can therefore also influence the price.
What should you watch out for with coffee investments?
The majority of coffee production takes place in more turbulent regions. For example, you can find many plantations in Africa and South America. Political instability and crop failures can be a direct threat to the supply of coffee, which can cause the price of coffee to suddenly rise significantly.
When investing in coffee, it is therefore important to keep a close eye on these international developments. Scarcity can easily drive the price of any commodity to enormous heights.
A good example of this was seen in 2009 when a fungus began to grow on coffee leaves in South America. This caused many farmers to lose the beans even before the harvest. Yields in some regions declined by up to 40%.
Monoculture and the use of chemical agents can render large areas unsuitable for coffee production. If farmers in these regions do not develop in the right way, there is a great chance that coffee prices will continue to rise.
What are the best coffee stocks?
Buying Starbucks stocks
Everyone knows Starbucks , and for good reason! Starbucks is the largest and most influential coffee-related company in the world. With approximately 20,000 locations worldwide, Starbucks has turned coffee drinking into an experience. Especially among millennials, coffee drinking is more popular than ever.
However, the trend seems to be shifting somewhat. That same group of young adults wants to drink coffee in a conscious and responsible way, which means they look for organic and local coffee. In various regions, Starbucks loses market share to smaller, local players.
This Dutch company serves well over 100 billion cups of coffee annually and is also active in more than 100 countries. By investing in JDE Peet’s stocks, you are directly diversifying your risks across different regions. Another advantage of the company is that 75% of the brands they own are consumed at home, which makes the company well positioned for the transition to working from home.
Coffee consumption is still growing strongly in emerging markets, including India. By investing in Tata Coffee , you can take advantage of this trend. Tata Coffee’s market share is still limited, but with its enormous available capital, the company has enough potential to grow.
If you want to invest in various food products in addition to coffee, Nestlé is a good choice. The company produces various milk derivatives, baby food, and even breakfast cereals.
When you hear the brand name Dunkin’ Donut, you may not immediately think of coffee. However, this company is the number two coffee company in America. Unlike Starbucks, Dunkin’ Donut works entirely with franchises, which keeps operational expenses very low.
Since 2020, Dunkin’ Donut has been taken off the stock market due to an acquisition.
Luckin Coffee was a very attractive investment for a long time. The company quickly gained a large market share and opened store after store. However, after a major fraud scandal, the stock price plummeted. This shows that when investing in stocks, it is always important to investigate how the company performs. Even when the coffee price or coffee market performs well, a company like Luckin Coffee can still produce poor results.
Is it wise to buy coffee stocks?
Whether it is wise to buy coffee stocks depends on the market. Large coffee companies are expected to continue doing well. However, it is critical to remember that the price of a stock is determined by what people are willing to pay for it. If other investments become relatively more attractive, the price of coffee shares can still decline.
What is the current price of coffee?
Are you curious about the current price of the commodity coffee? In the chart below, you can see at what rate you can buy coffee with CFDs. By using the buttons, you can directly open a position.
Things to keep in mind when investing in coffee
When investing in coffee, it is important to keep an eye on the supply. A big advantage of coffee is the fact that many people are accustomed to drinking the beverage, which means the demand will not suddenly decrease. It is therefore mainly the supply side that will determine the price of coffee. In addition, coffee is a basic product that is often consumed during economically weak times, which makes it easier to predict the price of coffee than, for example, the price of a social media stock.
Therefore, follow the news closely and determine how the crops perform. Large quantities of coffee come from Colombia, and they have long struggled with leaf rust. Such an accident can have a strong influence on the supply side of coffee and this can bring the price of coffee to new heights.
Frequently Asked Questions about investing in coffee
How to invest in cotton (2023)? – cotton stocks & ETF’sIt can be very attractive to invest in cotton, as cotton is still used in half of all clothes produced. But how can you invest in cotton, and what should you watch out for? In this article, you will find everything you need to know about investing in cotton through stocks & ETF’s.
How to invest in cotton?
Option 1: Invest in cotton stocksThe most accessible option for investing in cotton is to buy stocks of companies active in the cotton industry.You can invest directly in cotton by purchasing shares of a company that produces cotton. Examples of such companies are Albany International, Unifi, and Culp. You can also choose to invest in fashion companies like Ralph Lauren or Hanesbrands. Keep in mind, however, that these are indirect investments: the cotton commodity does not directly affect the company’s entire result.Are you curious about the best places to invest in cotton stocks? Have a look at the overview below:
|Buy cotton without commissions. Your capital is at risk. Other fees may apply.|
|Speculate with CFD's on increasing & decreasing prices of cotton! 82% of retail CFD accounts lose money.|
|Benefit from low fees, an innovative platform & high security!|
|Speculate on price increases and decreases of cotton with a free demo!|
Option 2: Invest with an ETF in cottonYou can also decide to invest in cotton with a fund or ETF. An ETF tries to track the cotton price as closely as possible. An example of an ETF that follows the cotton price is the iPath Series B Bloomberg Cotton SubIndex Total Return ETN. In this article, you can read more about investing in ETF’s.
Option 3: Actively trade cotton pricesFinally, it is also possible to actively speculate on the price movements of cotton by using a derivative. With a dervivate, you can:
- Speculate on both rising and falling cotton prices
- Use leverage to open a large position with a small amount
Why could investing in cotton be a smart choice?
1. Demand for cotton in emerging marketsCotton is a commodity that is always in demand, and the demand will only continue to rise in emerging economies such as China and India. When the demand rises, the cotton price is likely to rise further.
2. Climate change and scarcityAt the same time, climate change can limit production, which can lead to scarcity and higher prices. Therefore, keep an eye on the weather and climate developments when considering an investment in cotton.
3. Protection against inflationCommodities like cotton often rise in value with inflation. When product prices increase, the prices of commodities often also increase. This is why investing in cotton can provide a solid hedge against inflation. Furthermore, the price of cotton is quoted in dollars, which means you also invest in the dollar as a currency.
What are the risks of investing in cotton?
1. Alternatives to cottonWhen the commodity becomes too expensive, there are alternatives to cotton. Clothing companies may switch to synthetic materials such as polyester, which may become more popular than cotton. This is already happening in Western countries.
2. Governments influence pricesGovernments also regularly influence prices and may stockpile cotton in some countries, causing cotton prices to make unexpected jumps. Therefore, conduct a thorough analysis of the situation before opening an investment in cotton.
What is the price of cotton?Interested in the current price of the cotton commodity? In the chart below, you can directly consult the CFD price of cotton.
Speculating on rising and falling cotton pricesYou can invest in cotton by using two methods. The first option is to buy the commodity, which means you speculate on a rising cotton price. It is also possible to go short, which allows you to speculate on a decreasing cotton price.When investing in cotton, it is necessary to consider which direction the price is likely to go. You can do this by analysing the market situation. Look for news that predicts a decrease in cotton harvests. If this is the case, the price will likely rise due to supply and demand.
Should you invest in cotton today?Cotton is another commodity in which investors can invest. In the past, you saw that cotton prices mostly rose. Since we started using synthetic fibres, however, more and more producers are switching to these materials. Nevertheless, most of this decline in demand is offset by emerging markets that are using increasing amounts of cotton. Therefore, when investing in cotton, it is important to keep a close eye on the balance between supply and demand.
Frequently Asked Questions about investing in cotton
How to invest in corn (2023)? invest in corn stocksDo you want to invest in corn & corn stocks? In this article, we will discuss how to invest in corn, and we discuss the factors that influence the price of corn. With the information in this article, you can determine the right time to buy or sell corn.
How to invest in corn?There are different methods for investing in corn. You can trade directly in the price of corn, or you can choose to invest in companies that deal with the commodity. Below we discuss the different methods you can use to invest in corn.
Where can you invest in corn?You can invest in corn stocks & ETFs with the following brokers:
|Buy corn without commissions. Your capital is at risk. Other fees may apply.|
|Speculate with CFD's on increasing & decreasing prices of corn! 82% of retail CFD accounts lose money.|
|Benefit from low fees, an innovative platform & high security!|
|Speculate on price increases and decreases of corn with a free demo!|
How to invest in corn?There are different ways to invest in corn. You can trade directly in the price of corn, or you can decide to invest in companies that deal with the commodity. Below we discuss the different ways you can invest in corn.
Way 1: Actively investing in the price of cornIt would be very impractical to have a large amount of corn delivered to your home and then sell it through, for example, a platform like eBay. Fortunately, the smart minds of this world have come up with a better way to invest in corn: by using derivatives.Derivatives make it possible to actively speculate on the price of corn. You can use, for example:Open a free demo!
Way 2: Investing in corn stocksYou can also choose to invest in corn by buying stocks in a company that deals with the commodity. A good example of a comparable company is Kellogg’s. Kellogg’s is an American company that is primarily known for the production of various breakfast cereals, and corn is a key ingredient for this product.You can invest in different corn stocks, like:
- Archer-Daniels-Midland Company (ADM)
- Bunge Limited (BG)
Method 3: investing in ETFsIt is also possible to invest in corn by purchasing a participation in a special fund. The Teucrium Corn Fund is a good example of a fund that invests in corn by buying futures on the commodity.Want to read in detail how ETFs work? Click here!
Why is investing in corn interesting?There are several reasons why investing in corn can be appealing. In this article, we discuss various reasons.
1. Worldwide growthWorldwide, economies are still growing strongly. The best known example of this, of course, is China’s economy. With more than a billion hungry bellies to fill, corn is a raw material for which demand will only increase. Moreover, prosperity increases worldwide, which will lead to an increase in the consumption of meat. In practice, corn is also often used as food for livestock.
2. Protection against inflationIn economically tough times, central banks typically print money, which leads to inflation. This makes the money in your bank account worth less. By investing in a commodity like corn, you can protect yourself against inflation. After all, the price of corn rises along with global inflation.
3. DiversificationBy investing in a commodity like corn, you reduce the risk of your portfolio. When you only invest in stocks, there is a greater chance that all your investments will become less valuable at some point. A higher level of diversification ensures a stable growth of your assets.
4. Use as fuelCorn is used for generating biofuels such as ethanol. In South America, ethanol is widely used for cars. Also in the European Union, the demand for biofuels is increasing, which can make an investment in corn appealing.
5. It fits within the trendInvesting in corn fits within the global trend. Due to the rise of new markets such as China, India, and Brazil, the demand for both food and energy is increasing. The demand for a commodity like corn can therefore increase significantly.At the same time, corn also fits in a world where climate change receives more attention. People are looking for biofuels, and corn can be used for that purpose. The likelihood of crop failures in the future also increases due to rising temperatures. This makes investing in corn even more attractive.
What are the risks of investing in corn?Investing always involves risks. When you start investing in corn, this is, of course, no different. Therefore, let’s briefly discuss the risks of investing in corn.
1. Crop failuresCrop failures or even rumours of crop failures can increase the value of corn. Dry times cause large shortages. However, when the weather is good, there may be an abundance of maize on the market. This can lower the price of the raw material.
2. Political conditionsPolitical conditions also influence the price of maize. After Russia conquered parts of Ukraine, it became impossible for Russia to export maize due to sanctions. Such circumstances can strongly influence the price of maize.Therefore, when you invest in maize, it is important to keep a close eye on the macroeconomic conditions. Maize can be a very volatile commodity, with the price of the commodity sometimes dropping or rising by as much as 15% in a week. As an active trader, you can benefit strongly from these types of market movements.
Which maize stocks can you buy?In this part of the article we discuss some companies in which the raw material corn plays a major role. If you want to invest indirectly in the commodity, you could consider buying these shares.
Buy Ingredion stocksIngredion is a leading company in the sale of corn-based sweeteners. Americans love sweet and unhealthy products, and Ingredion knows how to capitalize on this. The company explores possibilities to expand further into South America and Asia. If they manage to sell many products there, the profitability of the company could increase even further.
Buy Green Plains stocksGreen Plains is an American company that converts maize into ethanol. This ethanol is then used to produce vinegar that can be found in your favourite Heinz ketchup. These products are likely to remain in demand, which makes an investment in Green Plains potentially interesting.
Archer Daniels MidlandArcher Daniels Midland is a company that is directly involved in the maize business. The company grinds 72 million bushels of maize per month, producing large quantities of ethanol, among other things. With almost 2 billion gallons of ethanol production per year, they are a massive player. Investing in Archer Daniels Midland stocks means taking a big maize position.
What is maize used for?Anyone who thinks that corn is only used as food is deceived. For example, the raw material is also used for the production of ethanol. Many cars in South America still run on this fuel. Corn is also an important ingredient in various paints, toothpaste, cosmetics, and even explosives!
What is the current price of maize?
Do you want to know the current price of the raw material corn? Below you can see the price at which you can trade maize CFDs:
Why should you trade corn?
Corn is an indispensable raw material with an important role in food production. It is used all over the world and generally serves as a source of nutrients. Commodities are largely straightforward to understand: where stocks or currencies seem complicated to many people, trading in a commodity such as corn feels natural.What is also appealing about the raw material is that the balance between supply and demand is much clearer. In the case of maize, the price is mainly determined by the balance between supply and demand; rumours about directors or strange lawsuits do not play a role in trading maize. But what are the aspects that influence the price of maize?
How is the price of corn determined?There are several factors that can influence the price of corn. Of course, the harvest is central. When there are many crop failures, the price of the commodity quickly rises. When there are no crop failures and there are surpluses of corn, the price will not rise.However, corn has more applications: it is also used as a biofuel. A new form of corn called tropical corn contains more sugar and is used as fuel. Nowadays, corn is genetically modified to offer more resistance to diseases and herbicides.There are useful documents that you can use to estimate price developments for the corn commodity. Every year in the second half of March, the US Department of Agriculture publishes a document called Prospective Plantings, which records how much corn farmers plant in that season. Other interesting documents that keep track of supply and demand are The Grain Stocks and Monthly Crop Production.
Some final investment tips for investing in corn
- Diversify: by investing at different times, you can benefit from an average return. It is also recommended to spread your money across different investment products.
- Understand your investment product: read the terms and conditions of the investment product carefully. For example, with many derivatives, you pay financing interest, which can make long-term investing costly.
- Macroeconomic investing: when investing in corn, the world economy strongly affects your results. Therefore, keep an eye on the economic situation and research how the demand and supply for corn develop.
In conclusion: is investing in corn wise?Speculating on the price of corn can be profitable. The price of corn is strongly dependent on the quality of the harvests and the developments on the supply side. By playing into this well, you can achieve a solid return by trading corn.
How to invest in Lean Hogs and Live Cattle (2023)?Did you know that it is possible to invest in lean hogs, live cattle, and feeder cattle? In this article, we discuss how you can invest in these meat products!
How to invest in cattle?You can find the different types of cattle that you can trade on the Chicago Mercantile Exchange:
- Slaughter pigs (lean hogs) are traded in dollars per 20 tons under the symbol HE
- Live cattle are traded in dollars per 20 tons under the symbol LE
- Feeder cattle (cows) are traded in dollars per 25 tons under the symbol GF
Where can you trade cattle & slaughter pigs?If you want to trade cattle & lean hogs, you will need an account with a CFD broker. In the overview below, you can see which brokers you can trade various types of cattle with:
|Buy cattle without commissions. Your capital is at risk. Other fees may apply.|
|Speculate with CFD's on increasing & decreasing prices of cattle! 82% of retail CFD accounts lose money.|
|Benefit from low fees, an innovative platform & high security!|
|Speculate on price increases and decreases of cattle with a free demo!|
Speculate on the price developmentsWhen you speculate with CFDs on the price movement of cattle & slaughter pigs, you have two options:
- Buy: you speculate on a rising price.
- Sell short: you speculate on a decreasing price.
What are slaughter pigs used for (demand side)?
- Food: slaughter pigs and cattle naturally taste delicious and are therefore used as food.
- Pharmaceutical products: lean hogs are used to make medicines.
- Other products: cattle is also used in, for example, clothing, cosmetics, and floor wax.
Where do most slaughter pigs and cattle come from (supply)?Most slaughter pigs and cattle come from China, followed by the European Union and America. As cattle can be grown in various environments, the world is not dependent on a few countries, which provides some stability on the supply side.
What factors affect the price of slaughter pigs and cattle?
1. Food pricesThe price of grain indirectly determines the price of cattle. Grain is widely used to feed cattle. When the price of grain rises, the price of cattle often decreases because farmers tend to sell them. However, in the long term, high food prices may lead to a rising price of slaughter pigs and cattle.
2. WeatherPigs and cows, like humans, become sluggish in hot weather. When the summer is exceptionally hot, animals tend to reproduce less, which may result in a shortage of new slaughter pigs and cattle later on. When the supply decreases, the price can increase.
3. Demand from ChinaThe demand for pigs from China is increasing rapidly. This emerging economic giant has more and more (wealthy!) mouths to feed. If this trend continues, the rising demand is likely to lead to a rising price of slaughter pigs and other cattle.
4. Exceptional situationsSwine flu or another disease can strongly influence the prices of pigs and cattle. In the past, large quantities of cattle had to be culled. As a result, the supply decreases, which may lead to a price increase.
5. Substitution by other productsThe price of slaughter pigs will not increase infinitely. When cattle becomes too expensive, consumers will switch to other sources of protein, like soybeans.
Future price of cattleThe price of livestock is mainly determined by the demand side. Meat is often a luxury product that is consumed more by people with more money (vegetarian food is often cheaper). As the middle-class increases in many countries, the demand for meat will rise. It is therefore likely that the price of livestock will continue to rise in the long term.
What are the risks of investing in livestock & slaughter pigs?
- Economic downturn in China: during an economic downturn, the demand for lean hogs and livestock may decrease, causing prices to fall.
- Image: health risks & increased focus on sustainability may reduce demand for meat.
- Better technology: if farmers become better at breeding livestock, supply may increase more than demand.
Why can it be interesting to invest in livestock?
- Betting on the Chinese economy: when the Chinese economy is performing well, the price is likely to rise, which is favourable for price development.
- Diversification: by investing in different investment products, you reduce the risk of your portfolio.
- Hedging against inflation: commodities are often an excellent hedge against rising prices, allowing you to protect your wealth.
Some final investment tips
- Practice: don’t dive in right away, and practice extensively with investing in commodities first. For example, you can practice with a free demo.
- Limit risk: do not invest all your money in slaughter pigs or other types of livestock. Spread your risks and avoid unnecessary risks.
- Research: analyse what factors influence the price and try to make predictions based on your research.
Frequently asked questions about investing in meat
How to invest in copper (2023) – buy copper sharesCopper might be an interesting commodity for investors in the year 2023. In this article, we will discuss everything you need to know about investing in copper and copper stocks.
How to invest in copper?
Method 1: Copper stocksYou can indirectly invest in the price developments of copper is by buying shares of companies that are active in copper production. Later in the article, we will discuss in detail which copper stocks you can invest in.It is important to remember that the stock prices of copper companies are not directly related to the price of copper. The performance of a company has a significant impact on the financial results. The overview below shows the brokers with which you can invest in copper stocks:
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Method 2: ETFs and ETCYou can invest in copper by directly tracking its price with an ETF or ETC – these are exchange-traded products. Click here to read more about investing in ETFs.You can invest in copper with an ETF such as:
- WisdomTree Copper ETF (COPAP): this ETF directly tracks the price developments of copper.
- Global X Copper Miners ETF (4COP): with this ETF, you can invest in companies that are active in copper production, such as Teck Resources and First Quantum.
Method 3: FuturesI would not recommend investing in copper with futures as you need a large amount to invest and even the smallest price movement can have a significant impact on your results. One future already refers to $120,000 in value.As an alternative, you can consider CFDs. With CFDs, you can speculate on both rising and falling copper prices. Trading CFDs is risky. Click here to try the possibilities for free with a demo.
Method 4: OptionsYou can also speculate on the copper price by using options. With an option, you buy the right to buy copper or copper stocks at a fixed price. The option expires at a certain point, which means you may lose your entire investment. Click here to read more about options.
What is copper used for?Before investing in copper, it is important to know what copper is used for. Copper is a reddish metal that, like silver, can conduct heat and electricity. Additionally, copper is very ductile, making it a useful material in construction.Another advantage of copper is that it is recyclable, allowing parts to be reused.Copper is used for the following applications:
- Building structures
- Electrical connections
- Electronic products (radio, TV, mobile phone)
- Computer chips
- Electric cars
Why might investing in copper be interesting?
1. You speculate on the housing marketCopper is widely used in building structures. When a lot is being built, the price of copper typically increases. Copper can therefore be an appealing investment when the economy is doing well.
2. You speculate on a sustainable futureCopper is an important material in electric cars. Sustainability is becoming an increasingly important theme: by investing in copper, you respond to this trend. More electric cars are likely to be produced and sold, which could benefit the price of copper.
3. Risk of shortagesEspecially when economic growth continues, significant copper shortages can occur. Many governments have strict environmental regulations, which means that not all copper reserves can be exploited. At the same time, demand for copper is increasing during the energy transition. When the shortage continues to grow, the price of copper can only go up.
What are the risks of investing in copper?
1. Economic crisisWhen the economy is performing less well, the price of copper is likely to decline. China is a large consumer of copper: in the past, the copper price often followed the stock prices of the country. With the rise of copper as an important product for electric cars, this relationship seems to be weakening. However, an economic crisis can certainly put pressure on the price of copper.
2. Alternative materialsProducers are constantly looking for alternative materials. For example, aluminium was first used for computer chips, but now copper is being used instead. When the price of copper rises too much, producers seek alternatives. This can lead to a decrease in demand and therefore a decrease in price.
What are the best copper stocks?Are you looking for copper stocks? In this part of the article, we briefly describe some companies that are active in the copper industry.
- BHP Group : BHP Group is a mining company from Australia. The company operates copper mines in, among others, Chile and Australia and pays a good dividend.
- Glencore : this company is one of the largest copper producers in the world. The company produces copper from mines located in Africa, Australia, and South America.
- Tack Resources : this is a mining company from Canada, which is a more stable region. Tack Resources is also active in the oil sector.
- Southern Copper : this company is active in Peru and Mexico. Interestingly, the company has the largest copper reserves.
- Lunding Mining : this player is mainly active in Europe with mines in Portugal, Spain, Finland, and Sweden.
What are the advantages of investing in copper?
- Diversification: by investing in commodities such as copper, you add diversification to your portfolio. This reduces the overall risk.
- Inflation protection: commodity prices often rise with inflation. This makes an investment in copper a good inflation hedge.
- Scarcity: commodity supplies are finite; therefore supply will eventually decrease. However, keep in mind that copper is recyclable.
Final investment tips for copper investments
- Understand the risks: investing is risky, which also applies to investing in copper and copper stocks.
- Make a plan: determine in advance how much you want to invest in copper and when you will exit. This prevents your emotions from influencing your decisions.
- Diversify your risks: invest in different investment products. With good diversification, you reduce the risk of your portfolio.
Frequently asked questions about investing in copper
How can you benefit from a falling oil price?The price of oil can fluctuate considerably: fortunately there are ways in which you can always benefit from a crashing oil price! During the corona crisis we had an unprecedented situation where the price of a barrel of oil fell below $0. How can you take advantage of such an exceptional situation?
How can you benefit during an oil price crash?There are various ways in which you can respond to a crashing oil price. Let’s see what your options are.
Active trading & short sellingYou can choose to actively speculate on the value of the oil price. You can do this with derivatives. By using derivatives you have the option to open a short position. With a short position, you achieve a positive result on your investment when the price falls. When the price rises, you lose money.A good broker to actively trade on the price of a barrel of oil is Plus500. With Plus500 you can speculate on rising and falling prices with CFDs. Do you want to start trading oil CFDs right away? Use the button below to open an account:
Look for bargainsYou can also choose to look for bargains. A company like Shell has been stable over a long period of time. The company pays out more dividends every year and has a solid business model. It has managed to survive the necessary crises in the past.The chance that a company like Shell will fail is therefore small. You can therefore see an oil crash as a good time to buy stable oil shares. A good party to buy oil shares is eToro. At eToro, you can buy and sell shares without paying commissions.
Follow a trackerYou can also look for a tracker that tries to approach the price of oil. An index fund, for example, tries to track the price of oil. Research carefully what each tracker is designed to do.There are also trackers that respond to a falling oil price. Other trackers do well with high volatility. You can invest with the right tracker under all market conditions.A good party to invest in trackers is DEGIRO. At this broker you can invest for free in the core selection of trackers. Use the button below to open an account with this broker:
Why did the oil price become negative during the coronacrisis?
The coronacrisis has brought all global economic traffic to a standstill. As a result, demand for oil plummeted to a new low.At the start of the crisis, the price of oil fell very hard. The oil-producing countries did not reach an agreement, as a result of which too much oil was still being produced. In the end, the 23 oil-producing countries made an alliance to reduce production. Even with lower production, however, the drop in demand was not absorbed properly.As a consequence, there was a serious overproduction. When you wanted to buy oil in May 2020, you would get money for buying it. It is expensive for the producers to store the 160 (!) million barrels of oil in oil tankers.Because of these events, people started dumping future contracts on oil. This happened because people in the current situation would prefer not to be left with a barrel of oil. As a result, US STI oil crashed 100% on 20 April and the price became negative.
What about the future of oil?The global economy is locked in and the demand for oil will not increase rapidly. Nevertheless, every crisis will be overcome. When the virus is under control, the economy will start running again. The worldwide economy is still running on oil. The demand for oil is therefore expected to increase, and it is therefore not unlikely that the price will reach new highs in the future.
How can you invest in precious metals?If you are going to invest, you can choose from many interesting investment products. One form of investment that is currently very popular is investing in precious metals. Precious metals are pure metal elements that have great economic value. In this article, you will learn how to invest in precious metals such as gold and silver.
How can you invest in precious metals?
There are several ways in which you can invest in precious metals. You can choose to actively trade in the value of precious metals. It is also possible to invest in shares or investment funds. Finally, you can also buy precious metals yourself.
Shares in precious metalsA good party to buy shares in precious metal companies is eToro. At eToro, you pay low transaction fees over your transactions. This allows you to achieve a positive return even with a small investment. Use the button below to open a free account with this broker:
Active trading in the price of precious metalsYou can trade in the price developments of precious metals using derivatives. Derivatives are contracts on the price of a commodity. This means that you do not buy or sell precious metal directly. With a derivative, you can speculate on both increasing and decreasing prices.By actively speculating on the price of a CFD precious metal such as gold or silver, you can react to the latest market conditions. A good party to try this way of trading is Plus500. At Plus500 you can try CFD trading completely free with an unlimited demo. Use the button below to instantly open a free demo account:
Precious Metals FundIt is also possible to invest in precious metals indirectly by joining an investment fund. Several funds closely follow the prices of precious metals. Please pay close attention to the management costs of a fund. Management costs can significantly reduce the return.The best party to trade precious metals through a fund is DEGIRO. At DEGIRO you pay no transaction costs when you invest in funds listed within the core selection.Use the button below to directly open an account with this broker:
Buy precious metalsIt is also possible to buy precious metals physically. Even though precious metals do not yield any interest, it is still a very popular investment product. Precious metals are especially popular in times of crisis. This is because precious metals preserve their value. The value of a precious metal is independent of inflation or the success and failure of a company.This makes precious metals especially popular among investors in times of recession. The value of the precious metal is not affected by an unstable economy. This gives you more peace and security in turbulent times.However, buying precious metals physically can be a hassle. You will have to store the precious metal somewhere. You will also have to protect your property against theft. This makes it essential to conduct research before you decide to buy precious metals!
Investing in precious metals manualWhat do you want to know about investing in precious metals? Navigate directly to the appropriate section in the article:
- Types: in which precious metals can you invest?
- Advantages: why should you invest in precious metals?
- Disadvantages: what are the disadvantages of investing in precious metals?
- How much should you invest?: what percentage should you invest?
- Pricing: how does the price of a precious metal come about?
GoldGold is still the best known precious metal and very popular among investors. Investing in gold can turn out very well during an economic crisis. Some investors buy gold to protect their portfolios against declines. When shares fall in value, you often see that a precious metal like gold rises in value. Gold can then act as a protection against a falling stock price. Would you like to know more about investing in gold? In our article about investing in gold you can read everything you need to know:
SilverSilver is also a popular investment. The price of silver does not always move together with the price of gold. This is because silver also has a clear industrial application. A big advantage of investing in silver, is the fact that this precious metal is a lot more affordable. This makes it possible to consider an investment in precious metals even with a small amount of money. Would you like to know more about investing in silver? Then read our special on this subject:
PlatinumThe precious metal platinum is used in catalysts for cars. Especially in diesel cars you see that a lot of platinum is needed. With the rise of electric driving, diesel cars are less popular. Cars that run on hydrogen, however, need platinum as well. An investment in platinum can therefore still be profitable. Do you want to know how investing in platinum works? Then read the article on this subject:
PalladiumAnother precious metal that many people trade in is palladium. Palladium is also a good catalyst and the metal has many similarities with platinum. Unique is that palladium can absorb up to 900 times its volume of hydrogen. Palladium is used for watches and in dentistry. A well-timed investment in palladium can provide a good return.
Precious metals are chemically unique and scarce. Because they are easy to shape, gold and silver have been used as money for thousands of years. The prices are volatile, but in the long run they hold wealth well.When you invest in precious metal, you have no counterparty risk. If you invest in a share or bond, there is always a risk that the counterparty will go bankrupt.Another advantage of investing in precious metals is that it protects you against inflation. The price of gold often rises along with the general price level. Buying precious metals can also be attractive when the currency you use decreases in value.Finally, gold is also a good, extra investment to diversify your investment portfolio. Gold does not correlate strongly with the prices of shares, bonds and real estate. When things go badly on the financial markets, you can achieve good results with gold.
Of course, there are also disadvantages to investing in precious metals. The biggest disadvantage is that precious metals themselves do not generate a cash flow. With shares or real estate you can build up a fixed income. Gold, on the other hand, only collects dust. You can buy shares in companies that are involved with precious metal, but when you do this you do not benefit from the advantages of buying precious metals.Another disadvantage of investing in precious metals are the high transaction costs. When you buy physical gold or silver, you have to store and move these commodities. Also, you often have to take out insurance. Because of this, investing in precious metals can cost you money!Also, investing in precious metals is a gamble. You buy precious metal in the expectation that an investor will pay more for it in a few years. When the opposite happens, there is no way to achieve a good result with an investment in precious metal.
Of course, there is no one-sided answer to the question of how much you should invest in precious metals. Some investors do not see the point of investing in precious metals anyway. Other, more anxious investors, on the contrary, buy enormous amounts of gold and silver.Well-known investors often hold five to ten percent of their assets in precious metals. Investor Kevin O’Leary invests 5% in gold. When the price goes up he sells some and when it goes down he buys some.
Coveted by scarcityPrecious metals are very scarce. Besides, many precious metals contain beneficial physical properties. This makes them suitable for various purposes and makes them even more attractive to investors.Various precious metals are used as high-tech materials in medical and aviation technologies. But did you know that your cell phone, laptop and television often also contain one or more precious metals? In the future, the use of these will only increase, which could further increase the price of precious metals.
Coins or bars?
If you have decided to invest in precious metals, you can choose to invest in coins or ingots. Bars are more suitable when you want to invest a higher amount of money and when you have good storage options. If you want to invest a smaller amount of money in gold, coins can be more practical. The face value of a coin is much lower. In addition, the coins have a face value printed on them, so you can also pay with them.In general, coins cost more money to produce. You can often sell coins for more money. In the end, it all comes down to your personal preference.
Silver or gold?The prices of silver and good often move together in the same direction. It is wise to buy them in uncertain times. When it became known that the United Kingdom would leave the European Union, the prices of the precious metals gold and silver rose immediately. Also, during the corona crisis, you could see that precious metals strongly increased in price.It is therefore wise to also look at the overall economic situation when you start investing in precious metals. Many precious metals are considered as a safe haven.Nevertheless, the precious metal silver has more industrial applications. As a result, the demand for silver has become more dependent on economic prosperity.
The price of gold rose sharply during the corona crisis
Online trading or physical trading in precious metals?
Nowadays, it is possible to trade in the prices of precious metals online. When you trade precious metals online with a broker, you often do this to make money in the short term. With our overview of brokers you can open a demo account for free at a broker, so you can try trading in gold and silver. However, it is still possible to physically purchase precious metals such as gold and silver in the form of coins or bars.
Trading natural gas: how can you invest in natural gas?Today, putting money into a savings account does not garner much interest anymore, which means more and more people are looking for attractive investments. Natural gas may be such an attractive investment. The demand for natural gas will only increase in the future. But how to invest in natural gas yourself?
How do you invest in natural gas?
Do you want to know how to benefit from natural gas price movements? You can invest in natural gas both directly and indirectly. In this article we discuss the different methods that exist to trade in natural gas.
Actively trading in the raw materialThere are several ways to trade in natural gas. You can trade in the price of natural gas using contracts. However, you should note that a small transaction fee is charged on each transaction. Of course, if you actively trade this amount will be larger than if you invest less frequently.When you trade in natural gas through contracts, you only trade in the price of the raw material. You never actually get the natural gas delivered. A big advantage of contracts is that you can also benefit from falling prices by taking a short position.Do you want to trade natural gas CFDs yourself? You can so with a free demo at Plus500! Use the button below to open a free demo account:
Investing in natural gas sharesYou can also invest in companies that make their money from gas extraction. It can be attractive to invest in these companies when the gas price is high. Shell and Gazprom are two companies that often trade in natural gas.When you start investing in natural gas shares, it is important to review the company data. After all, there are other factors besides the price of natural gas that determine the development of a company’s share price. Even with natural gas price rising, a company can produce poor results.Do you want to buy natural gas shares? It is prudent to buy natural gas shares at an affordable broker. This way you avoid losing a lot of money through transaction fees. In our comparison of high-quality brokers you can discover directly where you can invest in natural gas shares against attractive fees:
Investing in natural gas ETFsIt is also possible to invest on the price of natural gas with ETFs. ETF stands for exchange-traded fund. An ETF is a fund that is freely traded on the stock exchange. There are several natural gas funds that attempt to track the price of the raw material.A good example of this is the VelocityShares 3X Long Natural Gas ETF. This fund monitors the price of natural gas as closely as possible. Leverage is applied within the fund. As a result, the fund moves stronger than the price of natural gas itself. This allows you to quickly achieve high returns. However, if the price of natural gas plummets, you can also quickly lose a considerable amount.Another option is the United States Natural Gas Fund or UNG. This fund is focused on the price of natural gas within America. You can use this fund to speculate on price increases and declines in the raw material.
How is the price of natural gas determined?
Natural gas is a valuable raw material used by both individuals and companies. For example, you probably know that natural gas is used for cooking. The Dutch government is working to make the Netherlands natural gas-free. But even in a natural gas-free country, the raw material is still used for power plants to generate electricity.If you want to determine whether buying natural gas is a smart move in the long run, then you must look at global demand. For example, the demand for natural gas in the Netherlands may decrease. However, this does not mean that the price of natural gas in emerging economies such as China’s will not rise.The price of natural gas is partly linked to the global economy. In good economic times, there is often more demand for natural gas. But even in bad economic times, there is still demand for natural gas. Even the weather can be an important influence on the price. Both freezing winters and warm summers can lead to an increase in price.In freezing winters, more natural gas is used to heat houses. When it is very hot, more electricity is used to cool houses. Finally, the dollar price also affects the price of natural gas. The price of natural gas is quoted in dollars. At a low and therefore cheap dollar, the price of natural gas usually rises. This is because importers outside the United States can then buy and store natural gas cheaper.In short, given a sound global economy, extremely hot or cold weather, and a low dollar price, the price of natural gas often rises. Of course, this is short-lived and other factors also play a role. However, these may be good reasons to invest in natural gas.
How can you actively trade natural gas?
Investing in natural gas is becoming increasingly popular. It is characteristic of this type of investment that the price can fluctuate strongly. As a result, when investing in natural gas, it is wise to buy large amounts when the cost price is low. However, this does not mean that you need a large start-up capital.When the price of natural gas is exceptionally low, you can buy a lot at once without having to invest a huge capital. By applying leverage, it is possible to open a large position on natural gas with a small investment.However, it is important to know that if you invest in natural gas contracts you always invest actively. This means that you should permanently keep a close eye on the price movements of natural gas. Especially if you want to sell your natural gas directly when an explosive price increase occurs, you must follow the price of natural gas closely!Also use a stop loss. With a stop loss, you can automatically sell the natural gas contracts or shares at a certain value. This way you avoid losing your entire investment.
Which natural gas shares can you invest in?
In this section we discuss in which natural gas shares you can invest. Before you buy stocks, you must examine the company’s future plans carefully.
Buying Gazprom sharesIn the distant past, Gazprom was one of the largest companies in the world. After the stock market crash of 2008, the company has slumped considerably. Nevertheless, Russia’s Gazprom is still one of the biggest players in the gas market. When you invest in the company, it is important to remember that they are also active in the oil market.The Chinese market is the most important for the company. In 2014, the company signed a 30-year contract to supply 38 billion cubic meters of natural gas to the red giant. The company has access to 18% of the world’s reserves, so the delivery will not be a problem.Nevertheless, it is important to keep a close eye on political stability. Russia has used access to gas as leverage in the past. This kind of instability can put pressure on the profitability of a company like Gazprom.
Buying EQT Corporation sharesEQT Corporation is the major active player in the natural gas sector in America. Through the reserves that EQT has access to, the company can supply more than 10 million households with natural gas for 15 years. The company not only supplies natural gas: EQT is also active in the construction of pipelines. Due to the size of the company, an investment in the natural gas sector through EQT is fairly stable. However, there is not as much room for growth as there is for smaller, more speculative companies in America.
Buying Antero Resources sharesAntero Resources deals with a special form of natural gas: natural gas liquids. This form of gas is easier to transport and is usually traded at a higher price. They are in 600th place in the Fortune 500 list, so the company at least shows that they have taken a strong position in the market.
Uncertain economic climateIn an uncertain economic climate many forms of investments involve high risks. However, investing in natural gas can work out well in an uncertain economic climate. Investing in natural gas is increasingly seen as an exciting option for investors who want to vary their investments. In addition to investing in gold, investing in natural gas too is experiencing considerable growth.This growth is partly because an investor who buys natural gas for $1.80, has the potential to at some point sell his natural gas for triple that amount. The frequent market fluctuations make it interesting to actively trade in natural gas. However, you must realize that you are investing with money that you may not see a return on immediately. After all, no one can predict when the price of natural gas will rise again.
Strategy: protection against a weak dollarSome people use natural gas to hedge against a weak dollar. When the dollar price is low, you see the price of natural gas rise. Companies can then buy cheaper natural gas, which is beneficial for the price. By including natural gas in your portfolio, you can protect yourself against a low dollar price.Incidentally, there is a maximum increase in the price of natural gas. Consumers often still need gas to cook or to heat their homes. However, many companies have the ability to switch between different sources of energy. If the price becomes too high, they will be inclined to opt for alternative energy sources. This can put pressure on the price of natural gas again.
What is the current price of natural gas?Below you can see the current CFD price of natural gas. With the buttons, you can open a trade immediately:
Sugar trading: how can you invest in sugar?You can invest in stocks, but you can also choose to invest (part of) your assets in commodities. These include oil, natural gas, gold, silver, but also sugar. In this article you can read how you can invest in sugar.
Sugar as an investment productWhen you think of raw materials, you usually think of products such as oil, natural gas and gold. What many people don’t know is that sugar is one of the most widely used raw materials in the world. If you want to invest in commodities, you can also choose to invest in sugar.Not only do you put sugar in your coffee, but it is also added to many other products. Think of cakes, sweets, soft drinks and even many products you wouldn’t expect it from. The sugar industry is a multi-billion dollar industry that could be worth your investment.
How can you invest in sugar?
You can invest in sugar in different ways. You can choose to trade directly in the price of sugar. Another option is to buy sugar shares. Finally, you can also invest in sugar by buying a participation in a fund or ETF. Let’s see what the possibilities are!
Trading in the price developments of sugarIf you want to invest in sugar, you don’t have to buy pallets of sugar and store them in the attic. Anyone who trades in sugar always works with contracts. These contracts have a specific value.You can trade in sugar at an online broker. When you open a position, you have to indicate whether you think the price of sugar is going to rise or fall. If you opt for a long position on sugar, you speculate on a price rise. If you open a short position, you speculate on a price decrease.Tip: use a stop loss when trading in sugar. With a stop loss, you can limit your maximum loss on a long position or on a short position. With a stop loss your position will automatically be closed when a certain price is reached.
Investing in sugar sharesYou can also choose to invest in sugar by buying shares of companies involved in this commodity. Think of sugar manufacturers such as Imperial Sugar Company and Alexander & Baldwin. You can also invest in candy makers such as Hershey and Tootsie Roll Industries. Other factors besides the price of sugar play an important role in the performance of sugar related shares. Therefore, always research the company behind a share in detail.If you want to buy a sugar share, it is best to do so at eToro. At eToro, you pay low commissions on all (international) shares. As a result, you can quickly achieve a higher return with your investments. Use the button below to directly open an account with this broker:
Where can you trade in the price developments of sugar?There are various online brokers that offer contracts on sugar as an investment product. One of these brokers is Plus500. This broker has a large range of investment products and is 100% reliable. You do not have to worry that you will be scammed at this broker or that you will lose your deposit due to financial problems at Plus500. This broker is an absolute favourite with many traders.You can create a trading account directly with Plus500 to start investing in contracts on sugar. For many people it might, however, be wiser to practice trading first. You can do this by creating a demo account with Plus500. With a demo, you do not trade with real money, but with fictitious assets. If your trading activities go well, you can switch to a real money account.Especially if you have limited experience with investing or trading in sugar, it is wise to practice with a demo account first. Practice, after all, makes perfect. Use the button below to instantly open a free demo account with Plus500:
Investing in sugar ETFsYou can also choose to invest in sugar by using an ETF. With an ETF, you can make an investment in sugar within a few minutes. This form of investment is also suitable for the longer term. Examples of funds dealing with sugar are the iPath Series B Bloomberg Sugar Subindex Total Return ETN, Teucrium Sugar Fund and iPath Pure Beta Sugar ETN. A disadvantage of investing in sugar with ETFs is the fact that you have little control over your investment.
What are the advantages of investing in sugar?
Investing in sugar brings the necessary advantages. A big advantage of sugar is the fact that it is a mass product. As a result, other parties can hardly influence the price of sugar. As a result, the chance of price manipulation is much smaller.An increasing worldwide demand is also an advantage for making an investment in sugar. In emerging economies, the prosperity of the average resident is rising. More and more people will want to buy sweet products such as ice cream and syrup. The increase in demand for sugar could cause the price to rise.Sugar is an essential product that you can hardly ignore. The average Dutchman in the Netherlands consumes between 50 and 80 grams of sugar a day. Sugar is therefore added to many products. Did you know that you can even find sugar in bread? These are all tricks of the food products to make us addicted to certain foods.The biggest advantage of trading in sugar is the chance of achieving a high return. Especially in special circumstances, such as the failure of a harvest, the price can suddenly rise sharply. As an active trader, you can respond well to these circumstances, allowing you to convert these movements into sweet profits!
What are the disadvantages of investing in sugar?
Investing in sugar also has its drawbacks. Sugar itself does not give you a direct income. When you invest in a business, you often receive a profit distribution on it in the form of a dividend. Of course, you can avoid this disadvantage by buying shares in companies that are active in the sugar industry.Another risk for investments in sugar is the fact that the product is increasingly seen as bad. People focus on their health and try to eliminate sugar as much as possible. If this trend continues, the demand for sugar may decrease in the future.It is also important to remember that the sugar industry is closely monitored by, for example, the European Commission. Mishaps are punished. When you invest in a company that engages in shady practices, this can just go wrong.
How do you determine the value of sugar?
When you start investing in sugar, you have to determine whether the price will rise or fall. To achieve this, it is important to look at the difference between production and consumption. If the production is significantly higher than usage, the price will drop.It is important to mention that a lot of sugar cane comes from Brazil and India. When predicting the price you can therefore look at these regions. Extreme weather in Brazil, for example, can cause harvests to fail, resulting in a decrease in supply. If the supply is lower, the price will often rise.Finally, farmers may decide to switch to another crop when income from sugar decreases. This may be the case, for example, with import duties or when farmers’ debts increase. When investing in sugar, it is therefore important to keep a close eye on factors that may influence the supply side.
What is the current price of sugar?
Below you can see the current price of sugar. You can also open a CFD position directly on the commodity:
Platinum trading: how can you invest in platinum?Most people who invest (part of) their assets in precious metals choose to invest in gold or silver. These investments can earn you a lot of money, but you can also choose to invest in another type of precious metal. More and more people are investing in the precious metal platinum. On this page we will discuss how to invest in platinum.
How can you invest in platinum?
There are several ways you can invest in platinum. You can choose to speculate on the price development of the precious metal with a CFD. You can also choose to buy shares of companies that are active in the exploitation of platinum. Finally, you can also choose to invest in a fund or ETF that follows the price of the metal.
Investing in platinum sharesYou can also invest in the precious metal platinum in a more indirect way. You do this by buying platinum shares. There are not many companies that deal exclusively with the commodity. This is because platinum is often mined in combination with other raw materials.Are you looking for a good party to invest in platinum stocks? Then you’ve come to the right place at eToro! This broker charges low transaction costs when you buy shares. Use the button below to directly open an account:
Active trading in platinumYou can trade in platinum at an online broker. By investing in platinum, you can speculate on price fluctuations on this special precious metal. You have the following options:
- Buying: when you buy, you speculate on an increasing price.
- Short: when you go short, you speculate on a decreasing price
Investing in platinum ETFsYou can also choose to invest in platinum by using an ETF or fund. The best known fund is the Physical Platinum Shares. This ETF follows the price of platinum as closely as possible. Another option is the physical platinum euro hedged. The physical platinum euro hedged fund tracks the price of platinum in euros. The commodity is bought physically, which means that you actually invest in the underlying commodity.
Buy Physical PlatinumGiven the high value of platinum, you can also choose to buy the precious metal physically. Personally, I’m not a fan of this. You often pay relatively high premiums when you buy platinum coins or ingots. Moreover, you have to store the precious metal safely. Selling can also be a slow and awkward process in practice. Buying platinum is therefore more for the doom sayers among us who think that the system will eventually collapse.
There are several stocks with which you can have exposure to platinum. In this part of the article we give some suggestions of shares you can buy.
Buy Vale SA sharesVale SA is a Brazilian company that is active in iron ore, among other things. This huge mining company also collects a lot of platinum. Vale was badly in the news due to a dam failure for which the company paid substantial damages in 2019. An investment in Vale SA may turn out well at the right time.
Norilsk NickelOf course, a Russian company can’t be missing from this list either. This company produces both platinum and palladium. So with an investment in Norilsk Nickel you invest directly in two interesting raw materials.
Asahi HoldingsJapan is also included in this overview. This company is engaged in the recycling of all kinds of everyday products. Many products contain metals such as platinum.These materials can be easily reused. With an investment in Asahi Holdings you are also acting socially responsible!
Buy Lonmin sharesLonmin is a good share when you want a high exposure to the metal. The company extracts hundreds of kilos of platinum from its mines in South Africa every year. The share price strongly depends on the platinum price. When the price of platinum falls, the company makes less profit.
Anglo American PlatinumThe last share on our list of platinum shares is Anglo American Platinum. This company is also active in South Africa and has no less than 11 mines there. The company also owns three refineries that process the ores directly.With an investment in Anglo American Platinum you invest in palladium and rhodium at the same time: these raw materials are also processed in the company. With a total production of more than 2 million ounces, Anglo American Platinum is the largest platinum producer in the world.
The evolution of platinum prices over the period 1992-2012
Diesel is no longer trendingPlatinum is widely used for catalytic converters for cars. Especially for diesel cars a lot of platinum is needed. Platinum can help reduce harmful emissions. However, after the emissions’ scandal, the diesel engine fell into the damned pigeonhole, which did not do the price of platinum any good. Now that green and economical driving is becoming more and more popular, the price of platinum could come under permanent pressure.We also see that electric driving is becoming more and more popular. This requires other metals such as lithium. If this trend continues, it may become more attractive to invest in other raw materials.
Expensive dollarAn expensive dollar can put a lot of pressure on the price of platinum and other precious metals. This is because these precious metals are quoted in dollars on the stock exchange. When the dollar is expensive, people who use other currencies have to deposit more money for the raw material. This further increases the pressure probability of a downward trend.
Decrease in tradePlatinum is widely used for industrial products. Trade conflicts and wars therefore have a negative influence on the price of the precious metal. Therefore, pay close attention to the trade balance of the different countries that trade a lot in the raw material.
In the long term, however, demand for the precious metal remains. It may therefore still be interesting to buy platinum. Below we discuss a few things that may make this interesting.
A weaker dollarWhen the strength of the dollar diminishes, platinum can become more interesting. This happens, for example, when the FED lowers interest rates. Just like gold and silver, platinum is also often seen as a safe haven. Keep an eye on platinum during economically weak times.
South Africa & stabilityMost of all platinum can be found in South Africa. South Africa is not immediately known as the most stable country. Protests and demands for higher wages put pressure on the production. When the supply of platinum decreases, the price will increase.Therefore, keep a close eye on the economic and political stability of this country when considering an investment in platinum.
Driving on hydrogenNot all car brands are fully committed to electric driving. Volkswagen and Audi, for example, rely on the power of hydrogen. To drive on hydrogen, you need a lot of platinum. When hydrogen becomes relatively more popular, the price of platinum can rise.
Multiple applicationsA major advantage of investing in platinum, is the fact that the raw material has many applications. Platinum is widely used in jewellery. Especially the Japanese market for jewellery with platinum is large. More than half of precious metal is also used in industry. The diverse use of platinum, makes it more attractive to invest in this precious metal.
ExhaustionGold is a rare resource. In practice, platinum is even rarer. In the long run, therefore, the supply of platinum will decrease. Buying platinum can therefore certainly be an interesting option.Speculation is the act of buying and selling a security in the short term to quickly grab a nice profit. Because platinum is relatively volatile, you can achieve a good return by actively trading the commodity. With some brokers, you can even apply a leverage of 1:10 which allows you to take a large position with a small investment. In that case, you’ll have to be extra careful, as there’s also a greater chance that you’ll lose the amount of your investment.
Platinum is one of the youngest precious metals in the world. Unlike gold, for example, the precious metal was first discovered only 250 years ago. Of all the precious metals in the world, platinum is the rarest. This simply means that more gold and silver is mined than platinum, partly because there are fewer platinum sources in the world.The supply of platinum is small, but demand is high. This is because platinum plays an important role in modern science and industry. Platinum has more scientific and industrial applications. This makes the demand for platinum high.
Silver trading: how can you invest in silver?Like gold, silver is a precious metal that is limited in availability and can therefore increase in value significantly. But how does the value of silver actually come about? And how can you invest in silver yourself? In this article you will read everything you need to know before investing in silver.
How can you invest in silver?Investing in physical silver can be done through a special company where you can physically buy silver. It is also possible to actively trade in silver via the internet. We will discuss the different possibilities of investing in silver.
Method 1: Active trading using derivativesA popular way to trade in silver is by using derivatives. You can use CFDs to speculate on price rises and falls. CFDs are only meant for the short term.Would you like to try out the possibilities without risk by using a demo? Use the button below to instantly open a free demo account with eToro:
Method 2: investing in optionsIt is also possible to invest in silver by using options. With options, you buy the possibility (but not the obligation) to buy or sell silver at a certain value. When you make the right decision, you can achieve a price gain with your investment in silver. You can buy options with different expiration dates, which grants you the maximum flexibility. Do you want to know more about trading in options? In our extensive article about options we will discuss everything you need to know:
Method 3: track the silver priceIf you want to invest in silver in the long term, you can also choose to do this with a tracker. Trackers are securities designed to follow the price of an underlying security as much as possible. An example of a silver tracker is the ETFS Physical Silver. You can read more about trackers in the article investing in trackers.
Method 4: investing in silver stocksYou can also choose to invest in silver shares. By buying shares of silver mines, you indirectly invest in the price development of silver. When the price of silver rises, silver mines make a higher profit. Examples of companies you can buy shares in are First Majestic Silver Corp. and Coeur Mining Inc.The price of a silver stock is not directly connected to the price of silver. When you invest in a company, other factors also play a role. For example, a company can run its business more efficiently than another company. Therefore, study the fundamental data of the company first before you buy the shares.The best broker to buy silver shares is eToro. At eToro you pay low commissions when you invest in silver stocks. This allows you to achieve good results even with a smaller amount. Use the button below to open a free account with eToro:
Method 5: physical investment in silverPeople who are afraid of total monetary devaluation often prefer physical investments in silver. There are two methods in which you can invest in physical silver: by buying ingots or by buying coins.With physical investments in silver you have to pay attention. It is important that you take care of a good insurance and storage. With physical silver, you usually achieve a lower return than with derivatives. After all, there are extra costs involved in dealing with physical silver. Therefore, only buy physical silver if you are afraid that the world will burn in the future.
The demand for silver can be split into two parts. The first part is the demand for silver as a safe haven, and the second part is called the industrial demand.As much as 85 percent of the silver is used for industrial purposes. Silver is used in various technological products. A good example of a technological product that uses silver is the modern smartphone. Unlike gold, silver really has a practical application. With the rise of new economies, the demand for silver in electronic products will only increase.But the role as an industrial material alone does not explain the rise of silver in the last ten years. Silver is also seen by many people as a safe haven. Just like gold, people invest in silver to protect themselves in times of economic adversity. Silver is a good protection against inflation, for example.
The development of the silver price over the years
Investing in silver as a safe havenStrong increases in silver prices are often driven by an economic crisis. Investors look for a good and affordable safe haven for investments during a recession. The shift of silver from industrial metal to monetary metal is therefore responsible for a large part of the current price increase.Recently, there was a rise in precious metals again during a crisis. The corona crisis immediately caused the prices of gold and silver to rise sharply. It is therefore wise to buy gold and silver in economically uncertain times.As an investor, you have to see silver as a precious metal separate from gold. The silver market is about 19 times smaller than the gold market. But precisely this small market size in combination with a fast-growing industrial demand for the physical silver makes buying silver attractive in these times.
Industrial demand for silverAccording to The Silver Institute, about 900 million ounces of silver are used every year. At the same time only about 700 million ounces of silver are extracted from the silver mines. This means that a part of the supply of silver that is stored above ground is consumed every year. The silver stock, in other words, is shrinking drastically.In 1950, this total supply was approximately 10 billion ounces. According to the U.S. CPM Group, in 2010 it would only be 3.5 billion ounces. This can of course be a leading force behind the rise of the silver price. Most silver consumption took place in the West. When you consider that more and more Asians are starting to use phones, DVD players and iPods, you understand why buying silver can be a very interesting investment!
It’s affordableGold is too expensive for many investors. For an ounce of gold you have to deposit 1500 to 2000 dollars. If you want to protect yourself against a crisis, you have to deposit a large amount of gold in one fell swoop. Silver is often a factor 70 cheaper, which means that you can protect yourself against economic bad times for less money.
It’s tangibleNowadays, most investments are on paper. Money, stocks, bonds and even futures are all intangible. When you buy silver physically, you can take it with you and nobody has insight in what you do with it. People who consider their privacy important or who have little confidence in the financial system may consider buying silver.
Silver has valueYou can’t go to the greengrocer’s with a stick of silver. Yet silver is still seen by most people as a form of money. Physical silver always has value. This is due to the fact that it is not possible to print silver, and physical silver cannot be stored digitally. The fact that it is physical and has limited availability gives it value.You also have the advantage that there is no counterparty risk. You do not need another party to fulfil a promise. When you have money in your bank, this works differently. The bank must then be able to continue to actually deliver the money.
Easier to sellWhen we compare silver with gold, silver also provides you with more flexibility. When you physically own gold, you immediately receive a substantial amount for one ounce. With silver, you can sell an ounce for a way smaller amount of money. This makes it possible to sell silver for small expenses.
More movementThe market for silver is a lot smaller than the market for gold. Because of this you see that the silver price moves faster: both up and down. As a smart investor, you can benefit from this. When you buy silver in a bull market, you will get a better result. As a day trader you can also choose to take a short position on silver. With a short position, you can even achieve a good result in falling markets.
No stocksGovernments hold large reserves of gold. This is no longer the case for silver. Only in America, India and Mexico do governments still store the raw material. At the same time, we see that the industrial demand for silver continues to rise. As a result, we will be less and less able to meet the demand for silver. Buying a scarce raw material can work out well in the long term.
The World economy is growingAnother argument for an investment in silver is the rising global economy. The global demand for industrial goods is increasing. Silver is found in batteries and solar panels, for example. This raw material is therefore an indispensable metal for all kinds of applications. This is because silver is both electrically and thermally conductive and reflects. Economic growth seems unstoppable in the long term: the demand for silver will therefore only continue to rise.
The silver price has a limited ceilingWith many raw materials you see that a too strong rise in the price is slowed down. A high price of oil is, for example, disadvantageous for many companies. You then see that all sorts of agencies try to influence the price of oil. However, the negative effect of a high silver price for companies is limited. Each product contains only a minimal amount of silver.The only pressing factor is the Central Banks. When the silver price has risen a lot, you often see that the banks sell part of their supply. This will put some pressure on the silver price. Yet, you see that when silver start to rise, there is a lot of room for further increases. An investment in silver can therefore yield great results.
Derivatives can raise the price furtherIt is also important to remember that most investments in silver are made on paper. With derivatives investors constantly speculate on price increases and decreases. However, in most cases they do not want to receive the silver and accept the profit or loss in their local currency.When the economy is in terrible shape, investors can choose to receive the silver anyway. However, there are many more derivatives on silver in circulation than actual silver. As a result, the silver price can increase significantly.
As you have read above, there are plenty of arguments for buying silver. However, there are also plenty of reasons not to buy silver. If you buy silver physically, there is a risk of theft. However, this is not the only risk of investing in silver.Another major disadvantage of investing in silver is its limited liquidity. Shares are often sold on the stock exchange within a few seconds. When you want to sell physical silver, you will have to put in more effort.The return is also limited in many cases. This is because there is no company behind silver. When you buy a share, you know that there is a company behind it that makes a profit. You can then receive part of the profit in the form of a dividend. Silver is only a form of property from which you cannot get an income. Investing in silver is therefore only attractive in certain market conditions.Another disadvantage of silver, are the higher transaction costs. Especially when you buy silver physically, you often pay higher premiums. When you use a fund to invest in silver, you avoid paying high transaction costs on your investments.
Hedging silverYou can also choose to hedge silver. This is a strategy you can use to reduce the risk of your portfolio. When you invest in risky shares, you can use silver to insure your portfolio. If the shares plummet, part of the loss will be absorbed by the profits you make with silver.
There is a strong correlation between gold and silver
Silver is the new goldThe demand for silver is currently high, while there are only a few silver mines. Silver is often a by-product of lead and zinc mines. Silver therefore has the potential to become the new gold. The poor man’s gold’ might still be safer than gold.This is why more and more traders take the step to invest in silver. The biggest advantage of this is that as an investor, you are protected against inflation and economic uncertainty in this way. In addition, investing in commodities (and therefore also silver) is seen as an important part of a well-diversified investment portfolio. If you also have bonds and shares in your investment portfolio, it is also advantageous to own raw materials.
Are you wondering what the price of silver is? Below you can consult the current silver CFD price.
Gold trading: how can you invest in gold?In times of crisis investing in gold is often very popular. When the uncertainty in the stock markets rises, many investors manage to find gold again. But how can you actually invest in gold yourself? And what are the biggest advantages and disadvantages of trading in gold? In this article you will read everything you need to know before you start investing in gold!
How can you invest in gold?
There are roughly two methods to invest in gold: physically and not physically. When you invest in gold physically, you actually buy gold. However, most investors choose for non-physical ways to invest in gold.
How can you indirectly invest in gold?
We will first discuss the non-physical ways in which you can invest in gold.
Trade in gold actively using CFD’sYou can actively trade gold by using an online broker. With an online broker, you can trade in gold quikcly. You are not the physical owner, but you do benefit from price rises and falls by trading CFDs on the commodity.CFDs are very suitable for speculating on price rises and falls in the price of gold in the short term. With CFDs, you can apply leverage, which makes it possible to invest in gold with smaller amounts of money. Read more about investing in CFDs in this article.You can try the possibilities of trading in gold for free with a demo at an online broker. Would you like to get started with a free demo account at a broker? Use the button below to open a free gold demo:
Using an index fundThere are several index funds or ETFs that track the price of gold. You can trade ETF’s without effort at a broker. This allows you to sell your investment in gold without a hassle. When you invest in physical gold, selling it is more difficult. There are two types of gold ETFs:
- Bullion-Backed: These funds hold physical gold.
- Nonbullion-backed: these funds use financial securities as collateral.
Gold optionsWith options, you have the possibility (but not the obligation) to buy (call option) or sell (put option) a certain amount of gold. For an option, you pay a premium. A gold option always has a certain duration. Within this term you must exercise the option, otherwise it will become worthless.With options, you can use rather complicated constructions. A big advantage of gold options, is the fact that you are never obliged to exercise them. Do you want to know more about investing in options? In our course you learn everything you need to know:
Gold futuresFutures are binding agreements for the delivery of gold at a specified price & time. Because of the leverage and the obligation, you can quickly lose a lot of money with futures.
The gold accountThere are two types of gold accounts. These are the allocated account and the unallocated account. A gold account is an account that follows the gold price one by one. When you open a gold account, you buy a set amount of gold ounces. In the allocated account, the gold is the full property of the account holder. The serial numbers of the gold bars are known and the gold may not be traded without permission.In the unallocated account, the account holder will not be allocated any specific gold bars and the gold will be shared with other account holders. The advantage of this, is that the costs charged by the bank are lower. The disadvantage is that the account holder cannot always withdraw all the gold. Especially in times of crisis, the account holder is dependent on the creditworthiness of the bank.
Shares in gold mining companiesAnother way to invest in gold is by buying shares of gold mining companies. The cost of mining gold is generally fairly stable. As an investor, you can make a good profit with the right approach. It is important to remember that the value of shares in gold mining companies do not move one-on-one with the value of gold.It is therefore important to investigate how the company performs. The company’s results are influenced by other factors besides the price of gold. Some well-known gold shares are:
- AngloGold Ashanti Ltd.
- Goldcorp Inc.
- Barrick Gold Corp.
- Newmont Mining Corp.
- Franco-Nevada Corp.
How to buy gold?
It is also possible to physically invest in gold. When you invest in gold physically, it is important to take the extra risks into account. You should be able to store the gold safely.
Investing in gold barsGold bars come in different weights. The lightest gold bars weigh only one gram, while the heaviest ones weigh over one kilo. This allows you to invest both small and large amounts of money in gold bars. The relative premium or production costs are relatively lower with the higher weights. After all, it is cheaper to produce a larger gold bar.
Investing in gold coinsIt is also possible to invest in gold coins. The weight of a coin is usually one Troy or about 31 grams. The value of a gold coin mainly depends on the purity of the gold. Some coins are reinforced with copper. When trading gold coins, the type of coin can also determine the value. Rare coins have a higher value than the more regular gold coins.
What should you pay attention to when investing in gold?
It is important to use a reliable provider when you want to invest in gold. This of course applies to both trading gold securities and trading physical gold. For example, you can check whether the provider has a licence from a regulator. Often you have to pay for the gold in advance, so it is essential that the counterparty is reliable.When you purchase gold for more than $10,000, you often have to make a copy of your identification. It is also important to check whether the gold is safe at home. Not every household insurance covers gold bars. You should therefore check whether it is wiser to store your gold in a safe deposit box at a bank.
Every investment has its pros and cons. Also, with gold there are many reasons why it’s better not to do it.
You will not receive a dividend on goldWhen you put money in shares or bonds, you receive dividends or interest. When investing in gold you can only make a profit when the price rises. In the long term, an investment in gold can therefore be disappointing, especially in relation to investments in (gold) shares.
Poor returns with a good economyGold does particularly well in economically uncertain times. When the economy is doing well, it is better not to buy gold. Of course, you can always buy it as insurance to prepare for a potential future recession.
The gold market is volatileThe price of gold is very volatile. This volatility brings uncertainty.Money in a savings account yields a fixed interest rate. Nevertheless, gold generally performs better in the long term. It is also possible to take advantage of volatility by taking a short position. By using a short position, you can also earn money when the gold rate falls.
Poor results at high-interest ratesAt low-interest rates, gold does relatively well. However, when interest rates rise, gold often loses its shine. There are more relatively safe alternatives. Think for example of bonds or even a savings account. A rising interest rate can therefore be a good reason not to invest in gold.
Of course, there are also reasons why you should invest in gold. If they weren’t there, gold would probably have a much lower value.
Gold can protect you against inflationInflation is a natural phenomenon in which the value of money decreases over time. By investing in gold you can protect yourself against inflation. Over time, the value of gold rises along with inflation. At a later moment you can receive a comparable real amount of money for your gold.
Gold is scarceGold, like many other commodities you can invest in, is scarce. At some point, the raw material simply runs out. At the same time, global prosperity is increasing and more and more people are taking an interest in the raw material gold. It is therefore not unlikely that the price of gold will continue to rise in the future.
Good results at low-interest ratesWhen interest rates are low, investing in gold is a good idea. In this case, you will not miss out on a return on the money in your savings account. Moreover, the price of gold often rises at low-interest rates.
Spreading your risksWith gold, you can also spread your risk. Gold is a countercyclical investment product: when the economy is not doing well, gold often performs well. By buying gold, you can stabilize your portfolio and ensure that you achieve a positive return in both bad and good times.
Good results with a weak dollarWhen an important currency such as the dollar falls in value, it can be attractive to invest in alternatives. Investors then look for a safe haven. When the world burns, gold rises.
Whether investing in gold is wise depends very much on your personal situation. It is important to remember that gold is by definition a risky investment. Therefore, only invest in gold with money you can spare for the longer term.Then it’s important to time your gold investment. It is not wise to invest in gold when there is a strong bull market. A good example of a good time to buy gold is a crisis. During the corona crisis of 2020, for example, you saw the price of gold rise sharply.When you have decided to invest in gold, it is essential to draw up a good plan. Think for yourself at what price you will sell the gold again. You don’t make money on gold through interest or dividends. That’s why it’s important to take your price gain at some point.
Gold and silver are regularly mentioned together in one sentence. This is not strange, since they are both precious metals. Silver is often seen as the smaller brother of gold. However, it is questionable whether this is correct.Silver certainly seems to outperform gold in bull markets. This is probably partly because there are more applications for silver. Silver is widely used in technological products and with the further digitalization of our society the demand for these kinds of products is only increasing.An investment in silver can therefore be more interesting. Silver is still seen as a safe haven, but it can also do well in times of economic prosperity. Silver supplies are decreasing, while industrial demand is only increasing. In the long term, you can therefore achieve good results with an investment in silver!
A crisis!It is the end of February 2020, and you realize that the coronavirus is spreading over Europe. The stock markets are plummeting and investors are selling their shares en masse. Therefore, you are looking for an interesting alternative to shares. After some research you finally end up with gold.You decide to speculate on the price of gold with a CFD. You buy gold for an amount of 1400 dollars. In the beginning the price drops a bit more, but eventually the price rises again considerably. Eventually, you sell the gold for a price of 1550 dollars. You then achieve a positive return of 150 dollars per gold bar, which equals a return of more than 10%.With a derivative, you can choose to apply leverage. If you had applied a leverage of 1:3 in this example, you would have achieved a return of 450 dollars per gold bar or 30% on your investment. If you apply a leverage, your loss can of course also increase considerably.
Gold price development, source goldprice.org
A new gold mineYou have received a small inheritance, and you decide to invest a small part of it in a gold mine. You do this by buying shares in a gold mine at eToro without commission costs. A few weeks later you watch the news.Unexpectedly an enormous supply of gold has been found somewhere in Africa. The global gold reserves are suddenly much larger than expected. Due to the larger supply, the value of gold is decreasing. Because of this, people are massively selling the gold mine share.The share drops ten percent, and you achieve a negative return. Is the company still making a profit? Then it might be smart to just hold on to the stock. Panic surrounding news facts often affects the price disproportionately. There is a good chance that the share will be back on a nice plus in the future.
Bitcoin as the new gold?Gold has long been known as the safe haven. Today, however, a new player has arrived: Bitcoin. The Bitcoin also has no counterparty risk. When people are worried about inflation or the state of the economy, the Bitcoin’s price is rising. Trading in Bitcoins can be interesting in uncertain times. Click here to learn more about Bitcoins.
What is the current gold rate?
Below you can consult the current price of CFDs on gold:
Conclusion investment in goldInvesting or trading in gold can be very interesting. The precious metal is no longer linked to the dollar one-on-one. Yet gold still functions as a safe haven. You can therefore see gold as an insurance against downward markets and inflation. This can make it attractive in both the short and long term to invest in gold.
Investing in cocoaInvestment opportunities present themselves in all shapes and sizes. The market you choose depends on your knowledge and on the current profitability of the market. Investing in shares is only one investment opportunity. Ensuring a well-distributed portfolio is vital to long-term success.One way to diversify your portfolio is by investing in cocoa and other raw materials. Cocoa can be a stable and reliable pillar in your portfolio. In this article we teach you how you can inves tin cocoa.
Why would you invest in cocoa?Investing in commodities such as cocoa is a good move in diversifying your portfolio. Cocoa is a commodity, which means it is a stable and natural product, such as sugar or coffee. What makes investing in commodities interesting is the fact that we always need raw materials. There is a near-constant demand for the supply.
How can you invest in cocoa?There are several ways you can invest in Cocoa. We will discuss how you can invest in cocoa.
Active trading with derivativesDo you want to trade actively in the price of cocoa? This can be done using derivatives! For private investors, it’s possible to speculate on price increases and decreases in cocoa prices with CFD’s. CFD’s allow you to place orders on a falling or rising price.A good site to use for trading cocoa with CFD’s is Plus500. At Plus500 you can try the possibilities completely risk free with a demo. Use the button below to open a free trial account immediately:
Long-term investment in cocoaWould you rather invest in cocoa on a long-term basis? This can be done by buying an ETF (exchange trade fund) that deals with cocoa. A cocoa ETF is a fund that tries to track cocoa prices as closely as possible. The most well-known ETF to trade in cocoa is ETF iPath Cocoa ETF (NIB). A smaller fund you can invest in is iPath Pure Beta Cocoa ETF (CHOC). The latter, however, is less liquid because the fund attracts fewer investors.One of the cheapest platforms to trade in these and other funds is DEGIRO. Use the button below to open a free account with DEGIRO:
Investing in cocoa sharesUnfortunately, most cocoa-producing companies are not listed on the stock exchange. Do you want to invest in shares linked to cocoa? Then you can consider buying shares that are involved in the production of chocolate. Cocoa is the most important ingredient for a tasty chocolate bar.Do you want to know how you can buy cacao shares directly? In this article you learn in detail how you can buy and sell shares using the internet: Do you want to know which shares are heavily dependent on the price of cocoa? Below you will see a list of well-known companies involved in producing chocolate.
Known American chocolate shares:
- Hershey Co.
- Mondelez International
- Rocky Mountain Chocolate Factory
- Tootsie Roll Industries
Known Swiss chocolate shares
- Barry Cellebaut
- Chocolate manufacturers Lindt & Spruengi
Cocoa versus other raw materialsEven during a crisis people still need cocoa, coffee or sugar. The consumption of these products continues despite any global crises that may be occurring. This is different from commodities like oil and gas. The supply and demand for raw materials like cocoa, coffee & sugar remain relatively stable compared to these commodities.Gold and silver are available in smaller quantities and the supply has a direct impact on the market. This is not the case with cocoa. One does not suddenly discover a forest for cocoa plantations that suddenly doubles the supply and lowers the price. This means cocoa prices will never be as volatile as those of precious metals or cryptocurrencies.
Coffee, Cocoa and Sugar exchangeThe Coffee, Sugar and Cocoa Exchange (CS&CE) is a commodity exchange that was established in September 1979 to make trading in these commodities’ futures easier and safer. It is a specific exchange that specializes in trading in futures of these raw materials. This is the place to get your futures in these stable raw materials.
Soft commodities and hard commoditiesRaw materials, also known as commodities, are divided into two types: hard commodities and soft commodities. Hard commodities are natural resources that need to be extracted, such as gold, rubber and oil. Soft commodities are agricultural products or livestock such as maize, wheat, coffee, sugar, soybeans and pork.It is important to know the differences when investing in cocoa, because they both have different features and volatility. Hard commodities are dependent on natural supply whereas soft commodities are much more dependent on human beings.
Investing in cocoaIt can be wise to have soft commodity futures as part of your portfolio. By investing in raw materials such as cocoa, you will ensure further diversification within your portfolio. Investing in cocoa can be done through most online brokers and does not necessarily have to be done directly via the SC&CE.
Wheat trading: how can you invest in wheat?In this article you can read everything about investing in wheat. We discuss whether it is wise to start trading in wheat today. After reading this article, you can decide whether it is smart to invest in wheat through the internet.
How can you invest in wheat?
There are several ways you can invest in Wheat. You can trade directly in the price of the commodity. It is also possible to invest in a fund that follows the price of wheat. In this article you can read exactly how this works.
Trade actively in the price of wheatWhen we talk about direct trading in wheat, we are not talking about the physical purchase of large quantities of wheat. No, we are talking about direct CFD trading on the commodity wheat. In that case, there is no need to store wheat.You don’t actually invest in the wheat itself, but rather in the price of wheat. No one can then oblige you to supply the raw material, so you do not buy wheat, but contracts on wheat itself.It is important to keep an eye on the supply side of the market. In the event of bad news around the wheat harvest, it is wise to buy up wheat, as this is likely to push up the price.When the harvest is better than expected, you can consider a short position. With a short position, you can speculate on a decline of the price. You can invest money in wheat through an online broker. A strong broker where you can trade in wheat CFD’s is Plus500. With Plus500 you can try out the possibilities completely free of charge with a demo account. Use the button below to directly open an account:
Indirect investment in wheat with a fundIt is also possible to invest indirectly in wheat. Here, too, we are not talking about a physical purchase of, for example, a loaf of bread that happens to contain wheat.You could, for example, think of an investment in an index fund that closely follows the price of wheat. You can also buy wheat shares in a company that is often involved in processing wheat into products. Please note that in the latter case, the characteristics of the company also play a role.
Most people will know that wheat is a cereal; in fact, it is one of the most cultivated cereals in the world. This of course results in a lot of supply, which can also be seen in the consumption. Wheat, together with corn, is one of the most eaten grains in the world. Nevertheless, there is a lot of variation possibles within wheat.Wheat can be divided into different varieties; there is winter wheat, summer wheat and transitional wheat. This name refers to the moment of sowing. Most of the wheat originates from China, the US and Russia.
How does the price of wheat come about?Wheat is a raw material that is almost always in demand. This is because we use wheat for many products and people will always be hungry. The chance that the demand for wheat will suddenly drop is therefore rather small.The price of wheat is therefore mainly determined on the supply side. A failed harvest, for example, can lead to sharply rising wheat prices. It may therefore be wise to study how the harvest proceeds in the countries where wheat is mainly grown.
The resource without a dominant playerWheat can be grown almost anywhere. Because of this, there is no dominant player who can exert a lot of influence on the market. The largest producer of wheat is China, but countries such as India, Russia, America and France also produce large quantities of wheat.Because there is not a single player controlling most of the market, countries cannot play political games with the resource. This obviously benefits the stability of the resource.
The development of wheat prices in England
Application of wheatWheat is, of course, used as food. However, human consumption is not the main destination for wheat. Wheat, for example, is used to produce biofuels.
Wheat tradeRaw materials are often traded on a specific stock exchange. Wheat is traded on the CBOT or Chicago Board of Trade. One unit of wheat is 27.21 kilograms. We also call this a bushel. The value of this quantity is given in cents. When a bushel is worth 500, this means that you pay 5 dollars per 27.21 kilos of wheat.On this exchange, contracts of 5,000 bushels are traded, which means almost 30,000 kilos of wheat. Fortunately, you can also invest in smaller quantities of wheat at modern brokers.
What should you pay attention to when investing in wheat?
The price of wheat is highly subject to climate developments. When the weather is bad and there are many crop failures, the price of wheat can increase significantly. Industrial demand can also influence the price of wheat. This was seen after 2005, for example, when wheat was increasingly used to create ethanol, a biofuel.Of course, the growing world population also has a positive impact on the price development of wheat. As the number of people grows, so does the number of eaters.
Performance in relation to other cerealsIn practice, maize is more often used to create ethanol (a biofuel). This is lucrative, and you can see that more and more farmers have switched from wheat to maize. This may lead to scarcity of wheat in the future, which could further increase the price. Wheat, for example, is used a lot for pastas and pizzas and I can never get enough of that.
Investing in wheat sharesThere isn’t really a single company that relies entirely on wheat production. You can therefore only freely invest indirectly in wheat companies by investing in a company that is engaged in agriculture. Let’s discuss some shares that are active in this sector.
Buy Mosaic Company sharesMosaic Company did not exist for long, but is now the market leader in America in the field of potato fertilizer. The demand for artificial fertilizer is growing worldwide and Mosaic Company knows how to respond to this. They are active in more than 50 countries. Buying Mosaic Company shares can therefore be attractive.
Bunge Limited buy sharesBubge Limited is a company that carries out many agricultural activities. Wheat also plays a role within the business model of Bunge Limited. The company processes and transports wheat on a regular basis. It goes without saying that with Bunge Limited you are certainly not investing in the price of wheat, but rather in a large agricultural company. Therefore, first examine how the company is doing.
Arch Daniels Midland CompanyAnother large company active in agriculture is Arch Daniels Midland Company. This company owns more than 600 facilities where crops are processed and shipped all over the world. Here, too, you do not trade directly in wheat, but more in the agricultural industry as a whole.
What is the current price of wheat?
Below you can see the current CFD price of wheat:
Some tips for trading in wheatIt is now clear that the price of wheat is mainly determined from the supply side of the market. It is therefore wise to make a good analysis of the supply side of the market and to make a move only when there is an indication that the harvest is going exceptionally badly or well.In the long term, the demand for wheat is likely to continue to grow. After all, the world’s population is still growing and as a result there are more and more hungry people who need to be fed. Nevertheless, developments in the agricultural market may make it easier to grow wheat, so that a higher supply can be achieved with fewer resources.
How can you make a profit from buying oil barrels?The oil price moves a lot under the influence of supply and demand. This makes it a potentially attractive investment. Especially in the short term, you can make a lot of profit by buying oil barrels; of course, you can also lose a lot of money when things go wrong. In this article, we will look at how you can buy oil, and we will discuss the factors that influence the price of oil.
How can you trade the price of oil?
When you want to speculate on the price of oil, Plus500 is a good option. This is a professional broker where you can invest money in falling and rising markets. This can be done from as little as $100: making it possible for everyone to get good results buying and selling CFD oil barrels. In doing so, it is important to remember that as well as making a profit, you can also make a loss. At Plus500 you can start trading for free with a demo or with a deposit as low as $100.Use the button below to immediately open an account at Plus500:
Before you start trading oilBefore you enthusiastically start buying and selling hundreds of barrels of oil, it is important to establish some basic elements of investing. The first thing you should always do is establish the general trend. Check in which direction the price is moving most of the time; if the price has been falling for a year, the chances are slim that it will suddenly rise tomorrow. Therefore, be a sheep, follow the herd, and you will increase your chances of profit.When buying oil, it is important to cut off any losses as quickly as possible. Do not wait endlessly until you are in the minus: limit your losses and maximize your profits. You do this by selecting a logical moment in advance at which you will get out. This can for instance be a nice round number at which you have lost X number of percentages: this way you avoid losing all your money on one oil investment.
Other ways to trade oilIf you do not want to speculate directly on the price of oil, you can also make a profit by investing in oil shares and by investing in investment funds. In this part of the article we will briefly discuss how this works.
Trade in oil CFD sharesIf you do not want to invest in commodities, but still want to benefit from a rising oil price, you can consider investing in oil stocks. Oil shares are shares of companies that are active in the oil industry. Think for instance of a company like Shell or BP.A good party where you can buy CFD oil shares is eToro. Use the button below to immediately open an account at eToro:
Investing in a fundYou can also choose to trade in oil barrels by buying a stake in an ETF. An ETF is a fund that is traded on the stock exchange and tries to follow a certain index. Some examples of ETFs that deal in oil trading are:
- iShares Oil & Gas Exploration & Production UCITS USD (Acc) (EUR) | IS0D
- Xtrackers Stoxx Europe 600 Oil & Gas Swap UCITS 1C (EUR) | XSER
- Lyxor Index Fund – Lyxor Stoxx Europe 600 Oil & Gas UCITS Acc | OIL
- Invesco STOXX Europe 600 Optimised Oil & Gas UCITS | SC0V
Factors influencing the oil priceOf course, you make the most profit from buying oil by entering at the right time. Therefore, let’s look at what factors influence the price of oil the most.
The world economyDemand determines the price of a security. So, the demand for oil also determines the price of oil. When the world economy is performing badly, the demand for oil usually drops. This is because overall production falls and therefore less oil is used.It is also important to look at the economic situation in new economies. The great rise of China, for example, will certainly influence the price of oil in the future.Economic crises often put pressure on oil prices. You saw this, for example, during the corona crisis: the price of oil even fell below $0 per barrel. This situation was temporary, however, and the oil price rose above $50 again a year later. By cleverly capitalizing on these fluctuations, you can make a nice profit with oil barrels.
OPECOPEC or the Organization of the Petroleum Exporting Countries has several members who together export oil. The member countries form a cartel in which price agreements are made and export quantities are determined. OPEC’s decisions regarding the production have a direct influence on the current price of oil.In fact, when production is increased, the price of oil will fall with equal demand. Therefore, when you want to buy oil barrels, don’t forget to examine the supply side as well.
US dollarWhen you go to buy oil, the dollar plays an important role. This is because the price of oil is expressed in dollars. When the value of the pound rises at the same oil price, you can, for example, buy more oil for the same amount of pounds. When you use a currency different from the dollar, the value of the dollar compared to your currency has a strong impact on the price you pay for an oil barrel.
ConflictsConflicts, especially in oil-producing countries, also drive up prices. If civil wars break out in a large oil-producing country, this can push up the price of oil by endangering production. Therefore, keep a close eye on the international political situation.
The oil supplyOn the other hand, new oil stocks can bring the price down again. Oil is finite: when the commodity is almost depleted, the price will increase significantly. However, if a huge new discovery is suddenly made, this can push the price down as the supply increases again.
Speculation on the price of oilFinally, speculation plays a major role when it comes to the price of oil. The market for speculation has grown and speculators play a major role in the formation of the current oil price. It is therefore no longer always about supply and demand or actual use; no, it is often about the general feeling that investors have about the oil.
A big profit possible with oil?
Is it possible to make a big profit from oil trading? The answer is a resounding yes! By buying or selling oil at the right moment, you can make large amounts of money in a short time. At the same time, any profit can just as easily turn into a loss. Therefore, manage your risks wisely and only invest money in commodities such as oil when you can afford to lose it.Before you start, it is a good idea to practise with a demo. This way you can try out different strategies and test which way of investing suits you best. Use the button below to open a demo with a broker:
How to trade oil profitably?Before you start buying and selling oil, it is wise to study which factors influence the oil price. When you have a good understanding of how the price of oil is established, you can better respond to the latest developments. The news having a strong influence may be clear: in 2008, the oil price rose to more than 140 dollars per barrel to temporarily fall below 0 dollars in 2020!It is also important to recognize the players in the oil market. Most trading in the oil market is done by professional traders and hedgers, so the market reacts less emotionally than the market for growth stocks or precious metals. When stronger movements occur, more retail investors step in, increasing unpredictability.
Choice between Brent & WTI oilWhen you go to buy oil drums, you can choose between two types of oil:
- WTI: oil from America
- Brent: from the North Atlantic region
Make a planIf you want to invest profitably in oil, you will have to draw up a good plan. Determine when you will buy oil barrels and immediately draw up your exit strategy as well. By doing this at the start of your investment position, you prevent strong emotions from making an unwise decision.Also, always invest only with money you can afford to lose. That way, you avoid losing a lot of money by having to sell oil drums to repair your washing machine.
Trading oil: everything about oil investingOil is sometimes called black gold, and for good reason. It is considered as one of the most important commodities and determines the health of the entire economy. Oil reserves are running out and the battle for the rare black commodity will only increase. But how can you, as a private investor, benefit from this? In this article we will discuss how you can invest in oil.
Start to trade oil in three steps:
- Step 1: open a trading account by clicking here >>
- Step 2: go to commodities and look for oil
- Step 3: click the buy button to buy oil
How to invest in oil?CFDs, futures or options. Let’s see what the best options are.
CFDs on oilIf you want to speculate in oil barrels in the short term, CFDs are interesting. When you trade in crude oil with CFDs, you pay a specific amount in dollars and the barrels are then placed at your open positions. Of course, the barrels are never actually delivered, so only the price increase or decrease is important. Here you can read more about how trading with CFDs works.CFDs are perfect for speculating on crude oil price changes. You can also speculate on a price drop with CFDs. A good broker to trade in oil CFDs is Plus500. At Plus500 you can try out the possibilities completely free of charge and without risk. Use the button below to open an account immediately:this article you can read all about it!eToro.It is also possible to actively trade in oil companies’ shares. There are several brokers where that is possible. Want to know where to invest in oil stocks? Have a look at the broker overview immediately:
How can you predict the price of oil?day traders, investors who actively invest every day.Therefore, it is advisable to keep a close eye on the news reports. With each news story, consider the effect it will have on the average investor. Consider the following examples:
- A news report about the US deciding to tap into their oil reserves (1).
- A news report stating that consumers are increasingly using their car (2).
- There is a war going on in a major oil producing region (3).
Major events have a strong effect on the price of oil shares
Oil in the long termOil is clearly becoming scarcer: the emergence of new major players on the world stage such as China will only increase oil consumption in the coming years. According to recent predictions, it will only be 40 years before the oil supplies are fully depleted. At the moment, oil seems to be a great investment. As stocks continue to decline and consumption continues to increase, it is not unrealistic to assume that the price will rise further.However, it is also important to keep an eye on alternative energy sources. Oil and other fossil fuels are losing popularity because of the pollution they cause. Because of this, several companies are looking for alternative fuels. It may be that in the future an alternative source of energy will become the dominant factor. However, at this moment this is far from the case and until then, it may be attractive to invest in oil!
What should you pay attention to when investing in oil stocks?
Many people invest in oil stocks because of its stable nature. In the short term, the price of oil can fluctuate considerably. Nevertheless, the economy is running on oil and the price always reaches new peaks. But what should you actually pay attention to when selecting and buying oil shares?
Consider what you want to invest inOf course, everyone knows dominant parties like Shell and Total. However, there are many more companies active in the oil production process. When you invest in oil, you can invest in three different stages of oil processing: the upstream, midstream and downstream.The upstream sector is mainly concerned with oil exploration and production. Companies in this sector are looking for ways to get oil out of the ground. For example, a company like Fugro is looking for suitable locations to drill for oil. Other companies are again engaged in producing material or supplying labour. When the economy is doing well, these types of companies do well: there is more demand for higher production.The midstream sector is engaged in the transport and storage of oil. This sector is the link between the upstream and downstream sectors. Examples of companies active in this sector are Vopak and Scorpio. A company that deals with the storage of oil can also do well at a low oil price. In this case, there is often overproduction. These companies are then required to store all the oil that is not used.The last sector that deals with oil is called the downstream sector. This sector refines crude oil and then processes it into a usable raw material. Crude oil still needs to be converted to, for example, petrol for your car, asphalt or kerosene. Companies involved in this step in the production process include Marathon Petroleum and Exxon Mobil.Many larger oil companies are engaged in different components in the oil production process. Research in which market conditions the company you want to invest in does well. Some stocks may be less dependent on the price of oil than others.
Ensure sufficient diversityAlso, when you want to invest in oil by buying shares, you need to diversify sufficiently. It is unwise to put all your money into one oil share. Even in the case of a high oil price, a company can still go bankrupt. Mismanagement or fraud can change a company from a top-tier company to a total flop in a day.Therefore, do enough research when you invest in oil stocks. It’s important to understand how a company makes its profits.
Make a planBuying and selling oil shares indiscriminately during a crisis is not a good strategy. It is important to make a plan. First, think about why you want to buy shares. Do you want to build an income by buying stocks that pay a high dividend? Then an investment in Shell could work out well. Do you want to get a high price gain? Then you may need to invest more actively.Determine for yourself what your goal is and then write down what your price target is. That way, you keep following a clear plan and don’t lose unnecessary money when you panic.
Pay attention to the costWhen you start investing in stocks, it is essential to pay attention to the costs. By investing with an expensive broker, you sometimes lose out on many thousands to tens of thousands in the long run. Do you want to know which brokers you can invest with the cheapest? In our overall overview you can immediately see what the best party is to start trading oil stocks:
How can you make money from falling oil prices?
It is also possible to make money from falling oil prices. You do this by placing a short position on the price of oil. When you open a short position, you place an order on a falling oil price. This has the following effect:
- When oil prices go up, you lose money.
- When the oil price falls, you make money.
Current oil price
Do you want to start investing right away?Before you decide to invest in oil, it is wise to practice with a free demo account first. This makes it possible to learn the basics of investing first, so you can make a successful start.
When I was 16, I secretly bought my first stock. Since that ‘proud moment’ I have been managing trading.info for over 10 years. It is my goal to educate people about financial freedom. After my studies business administration and psychology, I decided to put all my time in developing this website. Since I love to travel, I work from all over the world. Click here to read more about trading.info! Don’t hesitate to leave a comment under this article.