Commodity trading has attracted speculators and investors for hundreds of years. Those trading metals, oil, and soft commodities such as coffee and cotton can make (or lose) money buying and selling relatively tangible assets. In-depth research techniques using fundamental analysis and technical analysis can help, but many in the market also incorporate gut instinct or industry knowledge about a precious resource and whether it is due a change in price.
The situation has moved on from merchants doing direct trades with each other, and modern online brokerage platforms allow anyone to access the markets and put on a position. Getting a trading decision right is always open to market risk and the chance that price might move in the wrong direction, but one risk that can be managed is operational risk. This relates to your choice of broker platform and can be more important than whether to buy or sell gold, oil, copper or soya beans. If you sign up with a scam broker, you can lose all your money overnight. This review of the best commodity trading platforms in India will outline the pros and cons of each and forms a shortlist of well-regarded brokers that are worth trying out.
The FXTM trading platform is all about giving traders just what they want. The Cent Account helps FXTM stand out from the crowd as it has a super-low $10 minimum balance requirement, which is ideal for beginners. All standards of traders are catered for, with the broker offering competitive pricing and market-leading trading infrastructure, which has proved popular with novice and experienced traders alike.
ForexTime (www.forextime.com/uk) is authorised and regulated by the Financial Conduct Authority with licence number 777911.
Exinity Limited (www.forextime.com) is regulated by the Financial Services Commission of the Republic of Mauritius with an Investment Dealer Licence bearing licence number C113012295.
Tickmill is a mid-sized broker that focuses on providing a high-quality service to its clients. It supports traders around the world, including India, and is favoured by those looking for cost-effective and reliable trading conditions.
Tickmill Asia Ltd – regulated by the Financial Services Authority of Labuan Malaysia (Licence Number: MB/18/0028 and Registered Office: Unit B, Lot 49, 1st Floor, Block F, Lazenda Warehouse 3, Jalan Ranca-Ranca, 87000 F.T. Labuan, Malaysia).
Tickmill UK Ltd is authorised and regulated by the FCA and is registered with number 717270.
Registered Office: 3rd Floor, 27-32 Old Jewry, London EC2R 8DQ, England.
BlackBull Markets is a New Zealand-based, new-entrant broker that is making waves in the broker sector. Set up by traders who spotted a gap in the market, the strong tech background of the management team has resulted in them creating a platform that is market leading in terms of operational functionality. Add to that the competitive pricing and strong regulatory structure, and it’s easy to see why the broker is attracting new clients.
BBG Limited is incorporated and regulated by the Financial Services Authority (FSA) of Seychelles.
“Black Bull Group Limited (trading name: BlackBull Markets) is a company registered and incorporated in New Zealand (NZBN 9429041417799).
Located at Level 22, 120 Albert Street, Auckland 1010. Black Bull Group Limited is a registered Financial Services Provider (FSP403326) and holds a Derivative Issuer Licence issued by the Financial Markets Authority.”
(Source: Black Bull Markets)
IQ Option has set out to make accessing the commodity markets easy to do. The broker has grown its market share in a very short period of time thanks to making the onboarding process fast and straightforward. Once on the trading platform, the neat functionality allows users to draw on expert advice and book trades from desktop or mobile devices. The 24/7 customer support is another nice-to-have feature that will be appreciated by both novice and experienced traders.
Headquarters: Yiannis Nicolaides Business Center, Agiou Athanasiou Avenue 33, 4102, Agios Athanasios, Limassol, Cyprus.
IQ Option Europe Ltd. holds Licence No. 247/14, issued by the Cyprus Securities and Exchange Commission, an independent public oversight agency responsible for regulating the investment services market in Cyprus.
OctaFX was one of the first offshore brokers to take the India market seriously. Its T&Cs are designed to help Indian traders access the global financial markets, and it has a strong track record in the commodity markets.
Octa Markets Incorporated is based at Suite 305, Griffith Corporate Centre, Beachmont, Kingstown, Saint Vincent and the Grenadines. OctaFX is licensed and regulated by FSA SVG licence number #19776 IBC 2011.
OctaFX.eu, run by Octa Markets Cyprus Ltd, is CySEC regulated (licence number: 372/18 at Cyprus Securities and Exchange Commission).
FBS has been operating for more than 10 years and has in that time built up a loyal customer base of more than 13 million account holders. Those who try the service appear to like it, and more than 80% asked said that they wouldn’t consider moving to another platform.
FBS is owned and operated by Tradestone Limited (address: 89, Vasileos Georgiou Street, 1st Floor, Office 101, Potamos Germasogeias, 4048 Limassol, Cyprus), registration number HE 353534, authorised by Cyprus Securities and Exchange Commission, licence number 331/17.
GKFX is a fast-growing and well-regulated broker offering fast and cost-effective access to the commodity markets. The additional research services provided by Autochartist and Trading Central are ideal for those who want to develop their understanding of how to spot trade entry and exit points.
“GKFX is the registered trademark of AKFX Financial Services Limited, which is ultimately subject to the same ownership and control of other businesses forming part of the Global Kapital Group.
AKFX Financial Services Ltd, bearing company registration number C60473, is licensed in terms of the Investment Services Act Chapter 370 of the Laws of Malta. with a Category 2 licence and is regulated by the Malta Financial Services Authority (“MFSA”) (license number IS60473).”
Almost all countries with developed systems of commodity trading apply some kind of regulation to the commodity markets. This means that trading in the instruments involved comes under a list or rules and regulations of regulatory bodies such as the SEC in the US or SEBI in India.
Commodity markets don’t tend to be as well-regulated as the equity markets, but there are moves towards making the markets safer for users. India’s capital market regulator, the Securities and Exchange Board of India (SEBI), is in the process of implementing a stricter regulatory framework for the trading of digital gold.
It’s important to keep in mind that regulation comes in two forms: regulation of the market (for example, the exchange on which oil is traded) and more general cover provided to account holders regardless of what market they are trading.
There is a need for account holders to check what cover applies to them, but reputable brokers see client protection as a potential selling point, so they take the matter seriously. Protecting clients is part of a successful business model that is designed to deliver an attractive and secure service.
Investors and traders who use a broker that is regulated by SEBI or any other regulators should look for these features:
The list of what the regulator demands of brokers operating under licence extends far beyond the above items, but it does depend on where you live and what regulator is enforcing the rules. Additional protections to look out for include Order Execution Policies, Pillar 3 disclosures, Anti-Money Laundering rules, Privacy Policies, and much, much more.
The process of gaining regulatory approval and satisfying ongoing reporting requirements is costly. As a result, any broker that opts to be regulated is demonstrating that it is a legitimate operation with a long-term business plan.
If the carrot associated with being regulated is that you can attract more customers, the stick is that the regulator can take action against brokers that don’t comply with the rules. Firms can be cautioned, or even struck off from being licensed if they transgress.
The big no-no for anyone looking to trade commodities is falling into the trap of using an unregulated scam broker. The broker may promise unbelievable returns but needs to be avoided. Considering the time, effort and expense that good brokers put into being regulated, there’s little benefit in choosing a broker that isn’t on a list of trusted brokers, such as the one provided above.