Historically, trading binary options was generally conducted with currency pairs and stock indexes. The analytics is written, the lively discussions are held, and the charts are prepared for these underlying assets. Though being close to the final consumer, trading commodities is not so popular or intensive in trading. In the end,erroneous impression of the smaller liquidity (and the lesser profit) of this asset is created.
It is necessary to explain that by commodities in the binary options’ market are meant energy supplies, metals, or food supplies. Briefly speaking, everything that is daily needed for the work of global industry is meant by commodities.
Peculiarities of trading commodities
Taking into account the certain everydayness of these assets, trading them is much easier than trading any other assets. That means that earning a profit trading it is far simpler. In theory, it must have led to the great popularity of these trading positions. This simplicity is explained by a few factors that are specific to this group of assets:
- First is a seasonal cycle. Do we have to explain why does an annual explosion of interest towards the energetic sector occur before the heating season? It is also applicable to the change of prices on fodder wheat depending up the yield of grain crop. This harmonic curve of demand is unchangeable; it slightly depends up any short term speculations in the commodities binary options’ market. There is no similar wave-like demand with any other underlying asset;
- Second is a trend. You don’t have to be an analyst to forecast the autumn’s movement of prices of coffee after the spring’s frosts, or the fall of prices of copper during a crisis in the electrical engineering industries. The market is chaotic, but the strength of such trend develops in the direction of strikes in the binary options’ market;
- Lastly, the third plus point is the rumors. News about commodities fills the entire information space. Prices of oil, bread, and tobacco are the news, and they circulate from each other because they spark interest. And only the commodity binary options trader can use them appropriately.
Benefits of commodities binary options
Having such powerful components like the long-term trend, the mid-term cyclicality, and the short-term information, the commodities’ trader has the unique opportunity that his colleagues, who works with currency, do not have. It is the particular accuracy of forecasts and the respective sustainable profit.