Alpha Commodities

Alpha Broking has a team of advisors who have many years of experience in trading commodities as diverse as gold, silver, oil, copper, wheat, coffee, corn, platinum, soybean etc.

Our private client advisors are able to provide helpful insight into each commodity, as well as commentary on prevailing market conditions and opportunities.

If you're new to the commodities markets, or would like to develop your knowledge, you are in the right place.  A basic overview follows, but for a more thorough understanding, please visit our free Knowledge Centre.

What Are Commodities?

Commodities are "physical products" over which contracts known as "commodities futures contracts" are traded on global exchanges. They include agricultural products like wool, beef, corn wheat, coffee, sugar;  or mining products like oil, coal, iron, copper, gold, silver  - and many others.

History of Commodity Exchanges

Trading in "Futures" was initially developed to help agricultural producers pre-sell their harvest at an agreed price.  And this is still one of the most important aspects of futures contracts today, although not limited to farming.

For example, a wheat farmer may sell his crop which is not yet ready for harvest by accepting a "future contract" for a guaranteed price for his or her crop at harvest.  The benefit of this to the farmer is that it reduces the element of risk by giving him a fixed and guaranteed price, which allows him to borrow funds against his "pre-sold" crop for equipment or other needs, instead of having to wait until his crop is physically sold at the market.

Similarly, an airline might want to "lock in" the price of aviation fuel if they felt it was currently cheap and were concerned about rising fuel prices in the future. (This was something Qantas did very successfully a few years ago.)

Some of the world's largest commodity trading exchanges were established in the 1800s - and they are still around today.

Who Trades Commodities Futures?

These days, almost anyone.  Typically, those who trade commodities futures contracts fall into two main categories:   speculators and hedgers. The hedger buys or sells contracts to reduce and manage risk, while speculators are those willing to accept some risk with the expectation of making a profit.

For more information, or to open an account, please contact a Senior Advisor.