Commodities are valuable raw materials or goods that are in demand to buy and sell. These raw commodities were traditionally traded on centralised regulated commodities exchanges (such as the Chicago Board of Trade and Chicago Mercantile Exchange). They are bought and sold in standardised contract sizes which can be settled by cash or by the physical delivery of the commodity.

Some categories of commodities that are commonly traded include metals (e.g. gold and silver), energy (e.g. crude oil and natural gas) or agriculture, (e.g. soy bean and wheat). Commodities traded as physical assets are typically traded as futures contracts. A commodity futures contract represents an agreement between two parties for delivery (either cash or physical) at a specific time in the future at an agreed price.

Nowadays, commodities can be traded by any investor as a CFD or a spread bet, which requires no physical settlement and where there is not necessarily an expiration as you can just roll the contract to the next month. Spread Co offer some of the lowest spreads you will find on commodities such as just 4 points on Crude and Gold.