How to Invest in Commodities in Canada

Commodities such as oil, metals, beef, or grains are bought and sold on a commodity exchange devoted strictly to financial transactions involving these goods. Canada maintains a strong commodities market for precious metals as well as crude oil and natural gas. Investing in the Canadian commodities market requires a trading account that allows non-residents to trade.

Instructions

1. Find a broker with access to Canadian commodities that allows non-resident accounts. Two established companies are TradeStation.com and InteractiveBrokers.com. Doing an Internet search for "commodities brokers" will offer many choices, but you should focus on companies with long-standing reputations in the marketplace.

2. Apply for an account. Commodities is considered an advanced investment strategy, so applicants may be declined for poor credit, insufficient savings, or lack of investment experience.

3. Fund the account, being sure to consider the fees associated with trades as well as the exchange rate, which may fluctuate.

4. Invest in Canadian commodities you are familiar with or can easily monitor. Commodities markets can fluctuate dramatically within a few minutes.

5. Monitor your investments closely. For Canadian commodities data, subscribe to news feeds that focus on that country's markets, such as StatPub.com and Finance.Yahoo.com.

Tips & Warnings

• To protect your capital, place a "stop loss" on each order. This means that if you don't contact your broker, the commodity will be sold once it reaches a specified price.

References

• Investopedia: Commodity
• Investing in Canada: Commodities
• Stock Trades: An Introduction to Commodity Markets

Resources

• Trade Station
• Ineractive Brokers
• Yahoo Finance: Commodity News
• Stat Pub: Canadian Agriculture News