Can you trade commodities in South Africa?

Commodities from South Africa

With the country being one of the largest producers of chicory root, grapefruit, cereals and maize, it would be an injustice not to be able to trade commodities in South Africa.

The dairy industry alone employs approximately 60,0000 workers and contributes to the income of many more families.

Commodities. What are they?

What is a commodity and what is commodity trading? According to the Cambridge English dictionary, a commodity is ‘a substance or product that can be traded, bought or sold’. Commodity trading, through a broker, involves speculating on price movements on products such as gold, oil and wheat.  

Commodity trading via a CFD

A CFD is an abbreviation for a Contract for Difference. An investor can trade various products via a CFD such as shares, foreign exchange and commodities.

It is an agreement, or contract, between two parties, the investor and the CFD broker.

The investor decides what product they wish to trade, the direction they expect the product or asset to move and the amount that they want to speculate. They also decide the level that they want to enter and exit the trade.  

At the outcome of trade, the investor will either receive an income from the broker if they have ‘called’ the trade correctly. Or conversely, they will pay the broker if the trade idea has been incorrect.

There are some key advantages to trading via a CFD. The investor never owns the underlying asset. They can use leverage to get more exposure to the market. They can go short (sell) as well as going long (buy) on a product.

Does Pepperstone offer commodity trading in South Africa?

Yes. Pepperstone offers commodity trading in South Africa via CFD trading. Aside from commodities, Pepperstone offers an array of asset classes and products that are available for trading. Also, traders have a choice between a multitude of platforms and a variety of trading tools to empower their trading.

Figure 1 Pepperstone products

If you’d like to know more about our product offering, please do not hesitate to reach out to us. One of our experts will be more than happy to assist you in getting started.