Commodities, which are raw materials used in industry such as gold, silver, copper, oil, natural gas, and corn are some of the most popular kinds of underlying assets which binary options are based on. Commodities binary options are extremely popular because commodity option trading is extremely volatile, with swings of as much as 30% a year, which makes it easier to predict short-term price changes with binary options. While there is a lot of risk with traditional commodities options trading, commodity binary options are much safer and can take advantage of certain, predictable price fluctuations.
One of the most popular commodity binary options is crude oil. One of the best possible times to make money off of commodity binary options trading is Wednesday at 8:30am EST, when the US department of Energy releases its weekly oil usage report. The price of crude oil almost always moves significantly after the release of this report, and the contents of the report can generally be predicted ahead of time. Similarly, the US DOE natural gas report is released every Thursday morning, and normally equals the same kind of price movements.
Copper has recently become one of the most heavily traded commodity binary options due to its increase in demand around the world because of its use in electric equipment and electronics. This has increased its volatility considerably, which is always a good thing for binary options traders. The more volatile a certain commodity it is, the easier it is to make short-term predictions on its movement.
Finally, gold, silver, and other precious metals remain one of the most-traded commodities on both the normal commodities market as well as the commodities binary options trading markets. Trader’s who use technical analysis for their commodity options trading find that gold and silver are quite predictable, given the right indicators, and during times of large economic growth or recession there are quite a lot of profits to be made.
As with trading other kinds of binary options, you should understand the underlying assets of the commodities themselves before you embark on commodity options trading. The more you understand about the underlying market and the indicators of these commodities, the better you can be at trading them and making huge profits in the commodity binary options trading marketplace.