With inflation at its highest level in 40 years, many traders are turning to commodities as a safeguard against diminishing buying power.
But which is the best platform to trade commodities online or via an APP?
We’ve spent time investigating and comparing every single platform, so you don’t have to.
In this article, we’ll take you on a journey through the top commodity trading platforms available in the UK, showcasing their features, advantages, and how they can help you make informed and strategic trading decisions.
- What are the Best Commodity Trading Platforms in 2023?
- eToro, Best Commodities Trading Platform for Copy Trading
- Pepperstone, Best Commodities Platform for Beginners
- Interactive Investor, Best platform for Fee Transparency
- TradingView, Best Platform for Advanced Trading Tools
- What is Commodity Trading?
- Pros and Cons of Commodity Trading
What are the Best Commodity Trading Platforms in 2023?
In 2023, the commodities trading landscape is more competitive than ever, with several platforms standing out as the best in their respective categories.
eToro, Best Platform for Copy Trading – eToro takes the lead for copy trading, offering a seamless experience for investors looking to replicate the strategies of successful traders.
Pepperstone, Best Platform for Beginners – For those new to the world of commodities, Pepperstone emerges as the top choice, providing an intuitive interface and a wealth of resources to help beginners confidently navigate the market.
Hargreaves Lansdown, Best Platform for Educational Resources – When it comes to educational resources, Hargreaves Lansdown excels, offering extensive research materials and expert insights to enhance investors’ knowledge and decision-making capabilities.
Interactive Investor, Best platform for Fee Transparency – Interactive Investor sets the benchmark for fee transparency, ensuring that traders are well-informed about costs, which enables them to optimize their strategies effectively.
TradingView, Best Platform for Advanced Trading Tools – Finally, for those seeking advanced trading tools, TradingView stands out as the premier platform, boasting an impressive array of charting capabilities, technical indicators, and real-time market data, catering to the needs of even the most seasoned investors.
eToro, the Best Commodities Trading Platform for Copy Trading
- Copy Trading
- Wide Selection of Investment
- Easy Account Opening
- Pricier than the Competition
- Can only trade in USD, so FX fees apply
- Customer Support Could be Improved
eToro is a fantastic trading platform that offers a unique copy-trading feature, allowing traders to follow the trades of seasoned investors or even share their own trading strategies to receive exclusive perks.
The platform offers over 3,000 tradeable symbols, including CFDs, forex, and more than 25 commodities. You can also choose to trade commodity CFDs.
While the trading fees on eToro may be slightly higher than the very lowest fee platforms, traders who value ease of use and a wide selection of tradeable symbols may find it worth the cost.
eToro Commodity Trading Fees and Commissions
eToro charges various fees and commissions. These fees may vary depending on the type of commodity being traded and the size of the trade. Here are the main fees and commissions you should be aware of:
- Spreads – Like most online brokers, eToro charges a spread on each commodity trade, depending on the commodity being traded, as well as market conditions. Generally, more popular commodities like gold and oil have lower spreads than less popular commodities.
- Overnight Fees – If you keep your commodity positions open overnight, eToro will charge you an overnight fee. It will depend on the commodity being traded, as well as the size of the trade. This fee may be positive or negative, depending on the direction of your position and the prevailing interest rates.
- Inactivity Fee – eToro charges an inactivity fee of £10 per month if you do not log in or make any trades for 12 months to cover the costs of maintaining your account.
- Deposit and Withdrawal Fees – The broker does not charge any deposit fees, but does charge a fixed fee of $5 for withdrawals. There may also be fees associated with your payment method, such as a bank transfer or credit card fees.
- Conversion Fees – If you deposit or withdraw funds in a currency other than your account base currency, eToro will charge a conversion fee. This fee covers converting your funds to your account base currency. The conversion fee charged by eToro is currently 0.5%.
Commodity Trading Commissions
The commission charged by eToro for each commodity may vary. Some commodities, such as coffee, sugar, cotton, and cocoa, do not attract any commission. Other commodities, such as gold, silver, platinum, and palladium, attract a commission ranging from 0.45% to 0.70% per side.
It is important to note that trades in agricultural commodities like wheat and corn do not attract any commission.
76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Your capital is at risk. Other fees apply. For more information, visit etoro.com/trading/fees
Pepperstone, Best Commodities Platform for Beginners
- Competitive Spreads
- Free Deposit and Withdrawal
- Quick and Easy Account Opening
- Mostly CFDs
- Limited Educational Resources
If you’re a beginner looking to start trading commodities, Pepperstone is an excellent choice. This top-rated broker offers a user-friendly and intuitive trading platform, making it an excellent option for those just starting out.
One of the standout features of Pepperstone is its ability to offer access to many trading platforms, including MT4 and MT5, which are widely regarded as two of the best trading platforms available today.
These highly customisable platforms allow you to tailor your trading experience to your needs and preferences. You can easily customise charts, create indicators, and easily use automated trading strategies.
When it comes to trading commodities, Pepperstone offers a range of options, including gold, silver, oil, and many other popular commodities. You can easily access these assets through the MT4 or MT5 platforms, making it simple and convenient to start trading immediately.
Pepperstone Commodity Trading Fees and Commissions
If you have a standard account with Pepperstone, you will be charged a commission of £7 per lot for commodities. However, if you have a Razor account, you will be charged a commission of $3.5 per lot for commodities. This commission is applicable for both buy and sell orders.
In addition to the commission, Pepperstone also charges a spread for commodity trading. It may vary depending on market conditions, but Pepperstone ensures that the spread is always competitive and transparent.
- Gold – From 0.17 pips
- Silver – From 2.1 pips
- Oil – From 3.5 pips
- Natural Gas – 2.5 pips
Pepperstone also offers a swap rate for holding positions overnight. The swap rate is the interest rate differential between the two currencies in the traded pair.
If you hold a long position overnight, you will receive a credit to your account. If you hold a short position overnight, you will be charged a debit to your account.
The swap rate may vary depending on market conditions and the traded currency pair.
Pepperstone does not charge any deposit or withdrawal fees for commodity trading. However, if you use a third-party payment provider, they may charge a fee for their services.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.9% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Hargreaves Lansdown, Best Commodities Trading Platform for Educational Resources
- Great Educational Resources
- Superb customer service
- Fees on the High-Side
- No Live-Chat Support
Hargreaves Lansdown is the best traditional broker for long-term commodity investments currently available in the UK. Reputable and well-established, it’s got the feel of a private bank where you get a high level of customer service and a lot of reliability if you’re prepared to pay slightly more than average for the privilege.
Whether you’re new to commodity trading or a seasoned pro, Hargreaves Lansdown’s educational resources can help you make better-informed decisions and improve your overall trading performance.
Hargreaves Lansdown Commodities Trading Fees and Commissions
At Hargreaves Lansdown, commodity investments can be made through different avenues such as Exchange-Traded Funds (ETFs), Exchange-Traded Commodities (ETCs), and Contracts for Difference (CFDs). Each option carries a different fee structure, which we will outline below.
ETFs and ETCs Fees
ETFs and ETCs track the performance of specific indices, sectors, or commodities. When investing in commodity ETFs or ETCs through Hargreaves Lansdown, you will be subject to the following charges:
- Online Dealing Charge – £11.95 per trade for the first 9 trades in a month, £8.95 for trades 10-19, and £5.95 for 20 or more trades. These charges apply to each online trade and will be deducted from your account.
- Fund Management Charge – This is an ongoing annual charge levied by the fund provider and is calculated as a percentage of the investment value. This charge varies depending on the ETF or ETC and can range from 0.3% to 1% per annum.
- Account Administration Fee – Hargreaves Lansdown charges an annual account administration fee of up to 0.45% of your total investment value, capped at £200 per year for ETFs and ETCs.
Hargreaves Lansdown offers CFD trading through its dedicated platform, HL Markets. The fees and commissions associated with CFD trading include the following:
- Spread – Hargreaves Lansdown charges a variable spread depending on the specific commodity being traded. For example, the spread for trading gold CFDs might be 0.3 points, while the spread for oil CFDs might be 0.04.
- Overnight Financing – If you hold a CFD position overnight, you will be subject to an overnight financing charge, which is calculated daily based on the value of the open position. This charge is typically around 2.5% above the prevailing market interest rate.
- Guaranteed Stop-Loss Orders – If you opt for a guaranteed stop-loss order, Hargreaves Lansdown charges an additional fee, usually a small percentage of the trade value.
This fee ensures that your trade is closed out at the specified stop-loss level, even during periods of market volatility.
(capital risk applies)
Interactive Investor, Best platform for Fee Transparency
- HIghly Customisable
- Transparent Fees
- Great Customer Support
- Limited Product Range
- Limited Analytic Tools
If you’re a commodity trader looking for a platform that offers a user-friendly experience and a transparent fee structure, look no further than Interactive Investor.
As one of the leading online investment platforms, Interactive Investor has consistently proven itself a top choice for traders, whether new to the world of commodities or seasoned professionals.
The platform provides access to market data, news, and analysis, allowing you to make informed decisions about your commodity investments. This includes comprehensive charting tools, which enable you to visualise market trends and spot potential trading opportunities.
Interactive Investor operates on a flat fee structure, which means that you pay a fixed monthly fee for access to the platform, and in return, you receive a set number of free trades. This is particularly advantageous for commodity traders, as it allows you to manage your trading costs better and avoid unexpected fees.
The platform also offers competitive pricing for additional trades beyond the free allowance, ensuring you know exactly what you’re paying for.
Interactive Investor’s Commodity Trading Fees and Commissions
The broker’s fees are straightforward, mostly depending on your account type.
- Individual Trades Fees – Trades are charged based on your account type. Trades cost £5.99 for Investor Essentials and Investor Plan. If you have a Super Investor Plan, trades will cost you £3.99.
- Platform Flat Fee – The particularity of Interactive Investor is that the platform is based on a flat fee which depends on your account type. With this platform, you’ll have access to 3 account types: Investor Essential (£5.99 p/m), Investor (£9.99 p/m) and Super Investor (£19.99 p/m).
- Dividend Reinvestment Fee – If you reinvest your dividends, Interactive Investor will charge you a fee of £99p per share.
- Fund Charges – Interactive Investor charges a small fee on each fund, ETF and investment trust. These will depend on the Ongoing Charge Figure (OCF) and are charged annually.
Capital Risk Applies
TradingView, the Best Commodity Platform for Advanced Trading Tools
- Free Plan
- High-Quality Analytic Tools
- Active investors Community
- Access to Global Markets
- Detailed Charting Tools
- Limited Free Plan
- Limited Broker Options
- Poor Customer Support
TradingView’s powerful and user-friendly platform is widely considered one of the best options for traders seeking advanced trading tools and features to trade commodities.
The broker offers an impressive suite of tools catering to novice and seasoned traders. Its intuitive and easy-to-use interface makes it stand out, allowing you to access a vast array of customisable charts and indicators for commodities like gold, oil, and silver.
The platform boasts a comprehensive library of over 100 pre-built technical indicators, from moving averages to Bollinger Bands, which you can easily apply to your commodity charts.
One of the most attractive features of TradingView is its social trading component. By joining a community of like-minded traders, you can share ideas, discuss strategies, and learn from the experiences of others.
TradingView also excels in its compatibility across multiple devices. Whether you prefer to trade on your desktop, tablet, or smartphone, the platform delivers a seamless and consistent experience. With a reliable suite of mobile apps, you can monitor your trades and make crucial decisions on the go.
Lastly, the platform offers various subscription plans, from a free basic account to premium plans with additional features. This flexibility ensures you can find a plan that suits your needs and budget.
TradingView’s Commodity Trading Fees and Commissions
TradingView is primarily a charting and analysis platform, so it does not charge any commissions for trading. It provides access to various brokers you can connect to and trade directly from the platform.
TradingView offers four plans with respective perks
- Free – This plan is completely free, but it comes with limited features and functionality.
- Pro – This plan costs $14.95 monthly, including additional features such as more indicators, alerts, and data.
- Pro+ – This plan costs $29.95 per month, including all of the Pro features plus additional features such as custom indicators and unlimited saved chart layouts.
Premium – This plan costs $59.95 per month, and it includes all of the Pro+ features plus additional features such as priority customer support and access to exclusive data.
(Capital Risk Applies)
What is Commodity Trading?
Commodity trading is the buying and selling of raw materials or primary products. These raw materials are typically agricultural products, such as wheat, corn, and soybeans, or natural resources, such as crude oil, gold, and copper.
Commodity traders buy and sell these goods in financial markets, either physically (through the purchase and delivery of the actual commodity) or through futures contracts. Futures contracts are agreements to buy or sell a specific quantity of a commodity at a specified price and time.
Commodity trading is an important aspect of global commerce as it allows producers and consumers to manage risks associated with fluctuations in commodity prices. For example, a farmer who grows corn may use commodity trading to lock in a price for their crop before it is even harvested. Similarly, a food manufacturer may use commodity trading to secure a stable price for raw materials used in their products.
Pros and Cons of Commodity Trading
- Diversification – It is an effective way to diversify a portfolio since commodity prices are often not closely correlated with other asset classes.
- Hedging – It can help producers and consumers manage price risks associated with fluctuations in commodity prices by allowing them to lock in prices through futures contracts.
- High Returns – It can offer the potential for high returns, especially when there are supply and demand imbalances in the market.
- Liquidity – Commodity markets are often highly liquid, meaning you can easily enter and exit positions.
- Volatility – Commodity prices can be highly volatile, resulting in significant losses for traders who do not properly manage their risk.
- Speculation – Commodity trading can attract speculative traders who may not have an underlying interest in the physical commodity but are solely looking to profit from price movements.
- Price Manipulation -There have been instances of market manipulation in commodity trading, which can result in distorted prices and harm market participants.
- Complexity – Commodity trading can be complex and require a significant amount of knowledge and expertise to be successful.