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What are Commodity Futures?
Commodities are physical assets and goods like crops, energy resources, agriculture products, precious metals, or currencies. Commodities can be bought and sold for cash or other goods. Futures are legal contracts that require the holder to buy or sell a stock or other asset by a specific date for a specific price.
When investing in commodity futures, you are legally obligated to sell or buy a commodity for a specific price on a specific date. You'll make a profit if the spot price of a commodity rises since the seller will still have to sell the asset at the set price. However, commodities are generally volatile assets with high risk.
The commodity market is volatile, so create a custom risk management plan and invest through a reputable online or traditional in-person broker. Stay up-to-date on current market conditions and adapt your investing strategy as needed.
Best Commodity Trading Apps 2024
- TD Ameritrade: Best overall for beginners
- eToro USA: Best for commodity ETFs
- tastytrade: Best for low-cost futures
- Interactive Brokers: Best for global trading
- Tradeworks: Best research strategy database
- NinjaTrader: Best for trading tools
- E*TRADE: Best for margin traders and IRAs
- Goldco: Best for buying gold
- Charles Schwab: Best for education and expert research
The best commodity apps allow traders and investors to access global commodity markets and trade valuable commodities like precious metals, energies, agricultural products, and digital currencies. Some commodity platforms offer trading directly on your smartphone or tablet.
Here are the best apps for trading precious metals and other commodities as picked by Business Insider editors in 2024.
TD Ameritrade: Best Overall
TD Ameritrade is one of the best online brokerages for future trading and low-cost mutual funds. TD Ameritrade has low fees overall, but commissions on futures are slightly higher than other brokers on this list. But a regular DIY TD Ameritrade account has no minimum investment requirement.
TD Ameritrade offers commodity futures for metals, energies, agriculture, currencies, softs, stock indexes, interest rates, cryptos, and micros. You'll pay $2.25 per future contract.
Beginner investors can benefit from TD Ameritrade's "Fundamentals of Futures" course, which provides demos, videos, and quizzes on futures trading and related topics.
eToro: Best for Commodity ETFs
eToro offers a range of commodity ETFs for trading, including physically backed funds, equity funds, CFDs, and exchange-traded notes (ETNs). Commodity ETFs are a great way for investors to diversify their investment portfolios with significantly less risk than investing in physical commodities. The downside is that eToro does not offer commodity futures.
With eToro USA you can invest in commodity ETFs such as the United States Gasoline Fund (UGA), iShares Silver Trust (SLV), SPDR S&P Oil & Gas Exploration & Production (XOP), GraniteShares Gold Trust (BAR), PowerShares DB Oil Fund (DBO), Direxion Daily Gold Minor Index (DUST), and Direxion Daily S&P Oil & Gas Exp. (DRIP).
tastytrade: Best for Low-Cost Futures
tastytrade (previously known as tastyworks) allows investors to trade commodities such as futures, options, futures options, ETFs, and stocks with no account minimum. Available commodities include energy (like coal and crude oil), agriculture (like corn and soybeans), precious metals (like gold and silver), and currencies.
tastytrade commodity futures span multiple asset classes, including futures, micro futures, small futures, small futures options, and futures options. Opening commissions per contract for futures range from $0.25 to $2.50.
You can use tastytrade's Trading Pairs feature to balance out your investment portfolio. For example, you can invest in the gold and silver ratio, energy pairs, or grain pairs.
Interactive Brokers: Best for Global Trading
Interactive Brokers offers global commodity futures over 30 market centers on the globe. Commodity assets for futures trading include agriculture, energy, currencies, metals, and softs. Futures commissions range from $0.25 to $0.85 per contract.
There is a $0 ($100 Interactive Advisors automated accounts) minimum to start investing with Interactive Brokers.
Tradeworks: Best Research Strategy Database
Tradeworks is an automated trading platform that implements algorithm research strategies and custom automated rules through trading bots. Tradeworks is not a broker itself but rather a tool that can be connected with an existing brokerage account.
However, Tradeworkers can only be implemented with MetaTrader 4 brokers like Avatrade, IC Markets, and FP Markets.
Although Tradeworks doesn't offer commodity trading directly, the platform can assist you in designing, testing, running, and analyzing trading strategies. Some of the best features include the Algo editor, the improved backtest tool, and the advanced performance analytic feature for real-time analysis of your trading strategies.
NinjaTrader: Best for Trading Tools
NinjaTrader is an online futures trading platform with over 100 futures trading tools, like customizable apps and strategies, free simulated trading accounts, live customer support, advanced charting features, drawing tools, automated strategies, and low-cost trades. There's no account minimum needed to open a NinjaTrader account.
Agricultural commodity trading on mobile is available on NinjaTrader, along with metal futures, natural gas futures, forex futures, crude oil futures, stock index futures, crypto futures, and interest rate futures. Regular futures commissions start at $0.59 per contract and $0.90 per contract for micro futures.
E*TRADE: Best for Margin Traders and IRAs
E*TRADE offers more than 60 futures contracting across various markets, including metals, energies, grains, softs, livestock, and currencies. The brokerage also offers interest rates, crypto, and equity index futures. Investors can trade regular futures, micro futures, and E-mini futures.
You must have an E*TRADE margin-enabled brokerage account or an eligible IRA to trade futures. You'll get 24/6 market access (from Sunday 5 p.m. to Friday 4 p.m. CT). Other features include no short sale restrictions, mobile access, formulated trading strategies, a suite of drawing tools, and access to E*TRADE's Futures Research Center.
E*TRADE also offers commodity ETFs that almost exclusively invest in commodity assets like agriculture, energy, or metals. There are no additional trading fees for ETFs.
Goldco: Best for Buying Gold
Goldco is our top pick for the best gold IRA. It allows investors to trade physical gold bullion and gold coins with an IRA, or get physical gold sent directly to them. Goldco also offers silver IRAs, platinum IRAs, and palladium IRAs.
Goldco is one of the industry's most trustworthy gold investing firms, with an A+ from the Better Business Bureau and a history of great customer support services. Another perk is that Goldco charges lower fees on greater asset amounts than some competitors.
Goldco allows you to fund your account with rollovers for 401(k)s, 403(b)s, IRAs, thrift savings plans, and savings accounts. The firm can also convert gold assets into cash for you. On the downside, you'll need at least $25,000 to open an IRA with Goldco, which is higher than with similar platforms like Augusta Precious Metals or Noble Gold Investments.
Charles Schwab: Best for Education and Expert Research
Charles Schwab offers commodity regular future trades and micro E-mini futures for energies, financials, metals, softs, livestock, and agriculture. The brokerage allows you to pay the same price for online and broker trades. And you'll get 24/7 customer support. You can even use Charles Schwab's team of specialists to review and place your futures trades.
Although contract fees for futures are higher than with similar brokerages ($2.25 per contract), investors will get access to Charles Schwab's vast range of research tools. This includes Schwab's Futures Research Center, daily analysis on the futures market, access to independent analysis from the Hightower Report and Wyckoff Report, and daily videos from futures experts.
Range of Tradable Commodities
Examples of tradable commodities include precious metals, energy (i.e., gold and silver), livestock, softs, and other agricultural products. Commodities can be directly traded for goods or cash, but other ways exist to invest in commodities.
Instead of dealing with the hassle of owning physical gold or cattle, you can indirectly invest through a brokerage account and trade commodity futures contracts. For example, you can invest in energy future trading applications to buy oil, natural gas, and other agricultural futures, like wheat and coffee.
With commodity futures, the futures contract holder must buy or sell a commodity on a specific date for a specific price to make a profit. Since futures tend to be volatile investments, individual investors may prefer options based on a futures contract, as holders aren't obligated to sell on a certain date.
Another option to invest in commodities is through stocks, ETFs, and mutual funds. These assets invest in companies that produce or process commodities. Mutual funds and ETFs are great tools for diversifying your investment portfolio and lowering your risk of exposure.
Why Should You Invest in Commodities?
Over the last few years, diversifying your investment portfolio with commodities has become an increasingly popular strategy. Commodities can be a great addition to a retirement savings plan or other long-term investment account.
Mobile commodity trading, in particular, has become a more sought-after investment strategy driven by advancements in trading app technology and the demand for on-the-go market access. Commodity trading apps offer an accessible way for investors to access real-time commodity pricing, advanced charting tools, and social trading features like chat rooms.
If you're new to investing in commodities or need help establishing a financial plan, you can find a financial advisor for expert guidance and advice. It's important to find the best financial advisor you can find.
How to Choose the Best Commodity Trading App
The best brokers for buying commodities offer diverse investments, low contract fees, accessible interfaces, and advanced charting features and tools. Experienced investors can trade commodity futures, options, ETFs, and mutual funds through online brokerages.
Only advanced traders with a high-risk tolerance should invest in commodities. However, some commodity trading apps with low fees offer beginner-friendly educational resources that may suit new investors. Mobile apps for commodity market analysis may be better suited for advanced, hands-on traders.
If you're interested in investing in precious metals, consider some of the best apps for trading precious metals, like physical gold as bullion bars or ingots. Unlike some commodities like livestock or agriculture, physical gold can be easy to store and won't expire. Plus, gold is largely immune to inflation and is a great hedge against economic struggles and disasters. You can buy gold from banks or gold dealers.
You can also invest in some of the best gold IRAs. But keep in mind that storage fees, custodial fees, and set-up costs tend to be higher with gold IRAs than other IRA plans. For instance, annual fees tend to exceed $100. Another thing to consider is that gold IRAs don't usually award dividends or yield high returns.
The following futures and commodities brokers offer some of the best investment options, account features, educational resources, and fees for futures and commodities brokers. Before jumping in head first, thoroughly compare the different brokerage account offerings and features to ensure you pick the best one.
Commodity Glossary
- Dow Futures Live Stream: The Dow Jones is one of the top stock market indexes, tracking 30 of the most prominent US companies on the stock market. You can use the Dow Futures Live Stream to watch real-time futures trading. You can also access real-time charts, news, futures analysis, and more.
- Commodities: Commodities are tangible, publically traded goods or assets, such as agricultural products, precious metals, energy resources, livestock, meats, and more. You can invest in commodities directly or indirectly through a brokerage.
- Commodity Market: Similar to the stock or bond market, the commodity market is a market that trades raw and primary goods and products. For example, the commodity market can trade soft commodities like wheat, sugar, coffee, or cocoa. Another example is metal commodities, which are mined materials like gold or silver.
- Commodity Future: One of the most popular ways to invest in commodities like agricultural goods or mined raw materials is through futures contracts. Rather than investing directly in a commodity, holders are obligated to buy or sell a commodity at a certain for a set price. The best brokers for buying commodities offer a range of commodity futures across different markets.
- Stock Futures Investing: You can invest in stock futures to hedge against inflation and diversify your investment portfolio. Stock futures are available through brokerages.
FAQs
You can trade all types of commodities on mobile investing apps, but every commodity investing platform offers all types of commodities. In general, availability varies by platform. If there's a specific asset you're looking to invest in, make sure the brokerage offers it as a trading option.
Commodity trading apps are regulated by the Commodity Futures Trading Commission (CFTC), an independent government agency, The CFTC also regulates commodity futures, options, and swaps. Make sure to verify a platform's regulatory status before opening an account.
How much you need to invest in a commodity trading app varies by platform and the kind of commodity you're investing in. Some investment apps allow traders to start with relatively small amounts (or no minimum at all), while others require much higher minimums. Gold assets, for example, usually require a larger initial deposit to start.
The best commodity trading app for you depends on your preferences, like your risk tolerance, time horizon, and investment goals. Your preferred investment strategy and trading experience also impact which commodity trading app suits you best.
Trading commodities on mobile poses certain risks since commodity assets can be more volatile than other traditional investment options. Before you start investing in commodities, make sure you understand the risks associated with commodity trading.
Why You Should Trust Us: Our Expert Panel For The Commodity Trading Apps
We interviewed the following investing experts to see what they had to say about commodity trading apps.
- Sandra Cho, RIA, wealth manager, and CEO of Pointwealth Capital Management
- Tessa Campbell, Investment and retirement reporter at Personal Finance Insider
What are the advantages/disadvantages of investing in commodities?
Sandra Cho:
"The advantages are that commodities can serve as a hedge during high inflationary times. This can be helpful if one expects inflation to rise in the near term.
"The disadvantages are that commodities do not offer the same long-term growth that is present in stocks. They also do not offer the same kind of stability that is present in bonds. In general, commodities are better as a short-term option during times of inflation versus a long-term investment where your money is parked for many years."
Tessa Campbell:
"The advantage of investing in commodities is portfolio diversification and hedging against inflation. Investing in tangible goods like crops, energy, precious metals, and currencies can counterbalance traditional investable assets like stocks or bonds. Diversifying your portfolio with traditional investment options and commodities mitigates your portfolio's risk. Moreover, investing in assets like gold or silver can increase portfolio stability.
"The disadvantage of investing in commodities is that they are generally illiquid. Commodities also don't earn dividends or accumulate interest."
Who should invest in commodities?
Sandra Cho:
"Investors who believe that a rise in inflation may be coming should potentially view commodities as a good investment. However, I recommend talking with a financial advisor before making any concrete decisions."
Tessa Campbell:
"Most commodity investments are considered high-risk and are generally best for experienced investors with a high-risk tolerance. However, some commodities (like precious metals) are more stable and don't pose as high of a risk. Precious metals can still be expensive, but more conservative investors may find investing in gold or silver a great way to diversify their investment portfolios."
Is there any advice you'd offer someone who's considering investing in commodities?
Sandra Cho:
"I would advise them to talk with a financial professional. Commodities can be a useful investment if used at the right time. However, many investors do not know when that time is. Talking with a professional will give investors the insight they need when deciding whether or not to invest in an asset class like commodities."
Tessa Campbell:
"If you're going to invest in more volatile commodities, such as agricultural products that depend on nature or other non-predictable elements, do thorough research before investing. You should also consider how you want to invest in commodities — whether that be investing in physical commodities themselves, commodity futures, or commodity stock — and make sure to understand the level of risk involved in investing in these assets."
Methodology: How to Choose a Commodity Broker
We used Business Insider's methodology for rating investment platforms when reviewing brokers for commodity trading to find the best platforms for low fees, multiple asset options, futures trading tools, and customer service. We also favored platforms that offered a range of other features and products, such as educational resources and account flexibility. Investment platforms are given a rating between 0 and 5.
