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Commodities Market Betting

Published on: 03/09/2016

Anyone trading in commodities should be aware of the high volatility of these markets. Like any market, they have a natural supply and demand but they are also influenced by other factors including politics, international events and weather. Commodities that can be traded include gold, oil and other metals and natural resources as well as crops and animal products. As a general rule, any resource that can be mined, harvested, drilled or grown can be traded on the commodities market.

Trading in can be traced back thousands of years to the farming practices of ancient Mesopotamia. Back then, Babylonian farmers would trade grain before harvest time to avoid any inflated prices due to droughts or unexpected losses due to high yields.

In the modern era, the Chicago Board of Trade was established in 1800s to regulate the future trading of commodities. However, it wasn’t until the 1960s, that the futures markets were opened up to non-agricultural products such as gold, silver, copper, platinum and oil.

Having the ability to trade on a regulated exchange gives producers and traders the chance to minimise their exposure to unforeseen price fluctuations by short selling as well as buying commodities.

In recent years, online betting companies have started to take wagers on these price fluctuations, allowing casual gamblers the chance to bet on commodities without actually buying the products. This type of financial wagering is becoming increasingly popular and is one of the fastest growing gambling sectors.

Anyone can now bet on the future price of oil, gold or coffee from anywhere in the world as long as they have an internet-connected device. Many of the well-known online gambling companies such as Ladbrokes have added commodities to their choice of markets. Specialist websites have also been set up to allow daily wagering on all the major commodities markets. Punters can bet if the price will rise or fall or they can wager on a per point basis. This type of spread betting is the most popular practice amongst commodity bettors who enjoy the flexibility of going long or short on a range of markets, and the ability to control risk by setting a price at which they can automatically bail out of a trade.

Commodity traders must also consider fluctuations in global currencies when considering trades. A trade in sterling may not perform as well if a commodity is quoted in dollars per unit and there is a shift in the exchange rate. All these things need to be understand if a trader is to be successful. As mentioned before, it is the volatility of these markets that makes them an exciting prospect, with huge swings in prices due to influencing factors not uncommon. Of course this can bring great rewards or great losses depending on how the trader is positioned in the market.

Published on: 03/09/2016 © Bet Bind
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