It’s a cliche but there really isn’t such a thing as a ‘sure thing’. While it’s true that commodities markets are less volatile than their financial counterparts, there are no certainties. Certain OPEC officials have predicted that oil prices will never bounce back to the $100 a barrel mark in the future, but it would be a mistake for traders to completely rule it out. After all, it was only in March 2014 that Brent Crude Oil prices were tipped to steadily soar, only to suffer a very heavy slump just a few months later.

When trading commodities you should consider that commodity markets can have a bearing on prices in other markets. Many industries make use of commodities and to a greater or lesser extent - depending on the nature of the business - will see their fortunes linked to commodity markets. Traders with an interest in commodities may find that they have a unique insight which will allow them to profit from any shift in certain equities. It is once more in the world of oil trading that we find an example of this. The fall in oil prices towards the end of 2014 and in the first few months of 2015 resulted in a drop in share value for energy companies. In contrast, some airlines saw their profits increase, due to the fall in fuel costs and the subsequent boost to their bottom lines. In this example, commodities traders would have been the first to feel the effects of the plummeting price of oil, yet uniquely positioned to take advantage by making equity market investments that would result from the oil price fall.

ETX Capital allow you to trade on commodity markets all over the world, but where are the main centres for commodities trading and which organisations regulate it? The biggest international commodity exchange is the CME Group, short for the Chicago Mercantile Exchange & Chicago Board of Trade. There are also large exchanges located in China, India and Japan. There are several regulatory bodies to oversee commodities trading. In the UK it is the FCA (Financial Conduct Authority) that regulates the trading of commodities. In Europe it is ESMA (European Securities and Markets Authority) who is the main regulator, while in the US the CFTC (Commodities Futures Trading Commission) are the chief regulatory body.