What is aluminum?
Aluminum is a common metal with a wide range of industrial applications. It was discovered in 1825 by Hans Christian Oersted. Aluminum is utilised in almost every industrial application. Its conductivity, light weight, malleability and strength make it indispensable in construction, semiconductor manufacturing and vehicle production. As it is easily recycled it is also used as a low-cost packaging option for consumer goods, particularly the beverage industry.
Industrial demand plays a significant role in speculation by traders and increasing demand from developing countries has played a key role in the upward aluminum price trend of the last decade. As the metal is rarely encountered as a free element in the natural world, refining operations are very energy intensive. In a typical operation over a quarter of overall production costs are energy related. The high energy demands of processing lead to a strong degree of correlation between the aluminum price and the global supply of oil. Traders should expect an increase or decrease in the value of aluminum to correspond to any change in the oil supply.
The majority of aluminum is produced in China, Russia and Canada with significant deposits remaining in Australia, Guinea, Brazil, and Indonesia. China, the USA and Europe are the largest consumers and recyclers by volume in the world.
Performance of aluminum
The aluminium spot has risen steadily since the market crash of March 2020 when it dropped to its lowest point since 2009, hitting $1,465.65 on 6 March. As of late May 2021, the aluminum price has traded within the 52-week range of $1,489.75 - $2,553.75.
The aluminum price chart indicates the high level of volatility that can be common when trading the metal. This volatility attracts traders looking for increased opportunities. The majority of trading in the metal is done through the futures market, with an average of over 200,000 contracts traded daily on the London Metal Exchange.
How to invest in aluminum
Those looking to invest in aluminum can trade futures or options on the London Metal Exchange or the New York Mercantile Exchange. You can also buy ETFS or stocks in mining or smelting operations which are involved in the industry.
Traders looking to invest in aluminum using the Currency.com tokenised platform are able to profit from upward or downward movements in the commodity without having to invest directly. Tokenised assets are crypto derivatives whose value is linked to the value of a particular asset, in this case the aluminum price.
The token is registered using distributed ledger technology (DLT), the same way cryptocurrency is recorded. This technology allows trading using crypto without the need to convert back and forth with fiat currency, saving exchange fees. The use of this technology allows tokenised asset trading to be efficient, inexpensive and secure.
Trading tokenised assets based on the aluminum price lets you take a long or short position depending on whether you feel the price today is over or under-valued based on the price chart. If you think the aluminum price will decrease you can take a short position and if you think it will increase you can take a long position. Trading in tokenised assets on Currency.com also allows traders to benefit from the leverage offered on the platform, up to 1:200 leverage on commodities.
Why trade tokenised aluminum with Currency.com?
Trading tokenised aluminum on the Currency.com tokenised assets exchange has a number of advantages. Tokens are underpinned by robust and immutable blockchain technology. Opening a trade will give you a token that tracks and moves according to the underlying instrument’s price.
Trade tokenised aluminum with Bitcoin or Ethereum. Benefit from the price movements without exchanging your crypto assets into fiat.
Trade tokenised commodities with a tight market spread and benefit from maker rebates and competitive taker fees.
Experienced traders can trade the world’s top commodities, with up to 1:200 leverage.
Manage your risks and secure your profits with stop loss and take profit orders. Save your assets with negative balance protection.
Currency.com has a scalable and low latency order management system, which can execute 50 million trades a second.
Currency.com operates under new Belarusian regulation with best-in-class AML and KYC laws. Regulatory details and fees are upfront.
Tokenised shares trading guide
Trading tokenised commodities is no more difficult than regular shares. To begin trading tokenised assets, you will need to follow some simple steps:
1. Register for an account with Currency.com.
2. Deposit funds (with crypto or fiat) in the account.
3. Determine the position size desired, accounting for leverage offered by Currency.com.
4. Determine your trading position (long or short) based on expected price movement and purchase tokenised commodities.
5. Currency.com matches the long orders from its clients with the sell orders and then hedges the unmatched orders through Capital.com, LMAX Digital or exchanges such as Binance, Bitstamp, Kraken, Nasdaq, NYSE, and Gain Capital.
6. Close your position when applicable. You can set a take profit or stop loss indicator to ensure you are not required to constantly monitor the price. Funds will deposit back to your account after closing and you can withdraw or take a new position.