Trading Commodities
Understanding physical commodities vs futures contracts on NYYU
Can I Trade Physical Commodities or Only Futures?
Explore NYYU's diverse commodity trading options including both physical assets and futures contracts
Quick Answer
At NYYU, we offer both physical commodities and futures contracts for trading. You can choose the approach that fits your investment strategy and risk tolerance. Physical commodities provide direct ownership of assets, while futures contracts offer high liquidity and leverage opportunities without owning the underlying assets.
Understanding Your Options
Physical Commodities
Own the actual assets
Trade and own tangible physical assets directly. This approach provides actual ownership of commodities like precious metals, agricultural products, or energy resources.
Futures Contracts
Trade price movements
Engage in futures trading to speculate on commodity price changes without owning the physical assets. Perfect for traders seeking liquidity and leverage.
Physical Commodities Trading
Trading Physical Commodities on NYYU
Physical commodity trading allows you to buy and sell actual tangible assets on our platform. You gain ownership of the underlying commodities and can hold them as long-term investments or trade them based on market conditions.
- • Direct ownership of physical assets
- • No expiration dates or rollover costs
- • Tangible investment with intrinsic value
- • Protection against currency devaluation
- • Option for physical delivery
- • Storage and insurance costs
- • Lower liquidity than futures
- • Wider bid-ask spreads
- • Delivery logistics for physical settlement
- • Minimum purchase quantities
Available Physical Commodities
💎 Precious Metals
Gold, Silver, Platinum, Palladium - Store of value and industrial uses
⚡ Energy Resources
Crude Oil, Natural Gas, Coal - Essential energy commodities
🌾 Agricultural Products
Wheat, Corn, Soybeans, Coffee - Food and agricultural commodities
🏭 Industrial Metals
Copper, Aluminum, Nickel - Metals used in manufacturing and construction
Availability varies by jurisdiction and may be subject to regulatory requirements. Check your account dashboard for commodities available in your region.
Step-by-Step Trading Process
1
Navigate to the Commodities Trading section and browse available physical commodities. Review current market prices, historical charts, and market analysis.
2
Select from available order types:
- • Market Order: Buy/sell immediately at current price
- • Limit Order: Set your desired price point
- • Stop Order: Trigger order at specific price level
3
Enter the quantity you wish to purchase (subject to minimum lots) and choose between vault storage or physical delivery.
4
Confirm your order details and execute. Settlement typically occurs T+2 (two business days). You'll receive confirmation and ownership documentation.
Storage and Physical Delivery Options
NYYU partners with certified storage facilities for secure commodity storage:
- • Insured, secure vault storage
- • Competitive storage fees (typically 0.15-0.50% annually)
- • Easy to sell without physical movement
- • Regular audits and certifications
- • Available for precious metals and select commodities
Request physical delivery of your commodities:
- • Delivery to your specified address
- • Shipping and insurance fees apply
- • Minimum quantities may be required
- • Delivery timeframe: 5-15 business days
- • Full ownership transfer upon delivery
Futures Contracts Trading
Understanding Futures Contracts
Futures contracts are standardized agreements to buy or sell a specific quantity of a commodity at a predetermined price on a future date. They allow you to speculate on price movements without owning the physical asset.
- • High liquidity for easy entry/exit
- • Leverage to amplify returns
- • Ability to profit from falling prices (short selling)
- • No storage or insurance costs
- • Tight bid-ask spreads
- • Hedging capability against price risks
- • Leverage amplifies losses as well as gains
- • Contract expiration requires rollover
- • Margin calls if positions move against you
- • Complexity requires market knowledge
- • Potential for rapid, significant losses
Futures trading involves substantial risk and is not suitable for all investors. Only trade with capital you can afford to lose.
Standard Contract Details
Each commodity has standardized contract specifications:
| Commodity | Contract Size | Tick Size | Margin Required |
|---|---|---|---|
| Gold | 100 troy oz | $0.10 | ~5-10% |
| Crude Oil | 1,000 barrels | $0.01 | ~5-8% |
| Corn | 5,000 bushels | $0.0025 | ~4-7% |
| Copper | 25,000 lbs | $0.0005 | ~5-9% |
Margin requirements vary based on market volatility and your account type. Check current requirements before trading.
Trading Futures Step-by-Step
Ensure your account is approved for futures trading and fund your margin account with sufficient capital to meet initial margin requirements.
Choose the commodity, contract month, and review contract specifications. Contracts are typically designated by month codes (e.g., CLZ25 for December 2025 Crude Oil).
Select order type and direction:
Watch your position, margin levels, and market movements. Set stop-loss orders to limit potential losses. Close positions before expiration or roll to next contract month.
Managing Futures Trading Risk
Never risk more than 1-2% of your account on a single trade. Calculate position size based on stop-loss distance and account value.
Always use stop-loss orders to automatically exit positions if prices move against you. Set stops based on technical levels, not arbitrary percentages.
Keep margin utilization below 50% to avoid margin calls. Maintain excess capital as a buffer for adverse price movements.
Close or roll positions at least 5-7 days before expiration to avoid delivery obligations and benefit from higher liquidity in front-month contracts.
Comparison: Physical vs Futures
| Feature | Physical Commodities | Futures Contracts |
|---|---|---|
| Ownership | ✓ Direct ownership | ✗ No physical ownership |
| Liquidity | Moderate | Very High |
| Leverage | None (full payment) | High (5-20x) |
| Storage Costs | Yes | No |
| Expiration | None | Yes (monthly/quarterly) |
| Short Selling | ✗ Not possible | ✓ Fully supported |
| Minimum Investment | Varies by commodity | Lower (margin-based) |
| Best For | Long-term holders, wealth preservation | Active traders, speculators, hedgers |
Trading Requirements & Prerequisites
- • Verified NYYU account
- • Sufficient account balance (no margin)
- • Understand storage/delivery options
- • Compliance with jurisdiction regulations
- • Futures trading approval
- • Minimum account balance (typically $5,000+)
- • Complete risk disclosure acknowledgment
- • Understanding of leverage and margin
- • May require derivatives experience
Market Hours & Trading Sessions
Trading Hours: Monday-Friday, 9:00 AM - 5:00 PM EST
Settlement: T+2 business days
Trading Hours: Nearly 24/5 (Sunday 6pm - Friday 5pm EST)
Maintenance Window: Daily 5:00 PM - 6:00 PM EST
Settlement: Real-time during trading hours
Specific commodities may have different trading hours. Check individual contract specifications for exact schedules.
Related FAQs
Explore alternative investment opportunities beyond commodities
Learn the basics of trading on the NYYU platform
Still Need Help?
Our trading support team can help you understand commodity options, account requirements, and guide you through your first trades.
Keywords: commodity trading, futures contracts, physical commodities, gold trading, oil futures, commodity investment, leverage trading, hedging strategies