Alpha Commodities

Alpha Broking has a team of advisors who have many years of experience trading, speculating and hedging on commodity prices. Alpha provides the ability to trade commodities through derivatives. When deciding on a commodity broker it is important to know which commodities are of the most interest to you as we offer a wide range of futures, contracts for difference, currency contracts and options contracts on 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. Alpha provides commentary and education on almost all commodities available for trading on an exchange. We can suggest which contracts to trade and which to avoid. For example wheat is a volatile commodity and there are many different ways to invest in wheat prices. You could purchase a wheat CFD, futures contract or shares in a wheat producing company.

If you're new to the commodities markets, or would like to develop your knowledge, you are in the right place.  Call us today to see what investment vehicle may suit you better.

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.

Who Trades Commodities Futures?

Investors and traders use these trading instruments to speculate on the prices of commodities. (I.e. Scott believes the Wheat prices will increase due to weather conditions in the Ukraine so he purchases a futures contract 3 months out with the view to realising a profit if the wheat price increases.). Exporters of commodities may also use futures contracts to hedge their exposure to the prices of certain commodities, locking in the prices for their hard or soft commodities ahead of their shipment dates.

Why Trade Commodities?

Australia relies heavily on exports of commodities such as Iron Ore, Copper & Wheat. Some of Australia’s largest companies are directly involved in exporting these commodities to the global marketplace. The marketplace for commodity trading has grown in the 5 years to 2007 by more than 500% on OTC markets and commodities derivative trading on exchanges by more than 200%. Agricultural contracts trading grew by 32% in 2007, energy 29% and industrial metals by 30% with precious metals trading growing by 3%.

History of Commodity Exchanges

Trading in "Futurescommodities" 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" commodities 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 was established in the 1800s - and they are still around today.

Contact Us

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