Invest In Copper – Investing in Copper Beginners Guide 2021

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Investing in precious metals is a great way to add a bit of diversity to your portfolio. Copper is a precious metal that is often overlooked but can be a very stable investment. While it may not be as flashy as silver or gold, copper has actually provided very strong returns for investors over the past few years.

In this article, we’ll talk about how to invest in copper as well as the pros and cons of adding copper to your investment portfolio.

#1 Broker to Invest in Copper – eToro

1
$50
Mobile AppYes
  • Buy over 800 stocks with 0% commission
  • Social trading network
  • Copy over 12 million traders and investors

How To Invest In Copper – Step-by-Step Guide 2021

There are a few different ways to invest in copper, and it can be a bit confusing if you are a beginner investor. Here’s what you need to do to get started.

  • Step 1: Open an eToro account –  Head to the eToro website and click the ‘Join Now’ button.
  • Step 2: Verify your identity – You will need to provide a passport, driver’s license, or other photo ID, as well as proof of address. Your proof of address can come from any official mail, such as a bank statement or a utility bill.
  • Step 3: Add funds to your account – You can do this very easily on eToro by going to the ‘Deposit’ section and adding the amount of money you would like to invest.
  • Step 4: Invest in copper – You can do this by buying stock in copper mining companies or copper ETFs, or by purchasing copper through futures contracts, which we will talk more about later in this article.

Where to Invest In Copper – Choose A Broker

Finding the right broker can be tricky, as there are so many different options out there. We’ve researched the best brokers on the market and provided our recommendations to help you make the best choice for your needs.

1. eToro – Best Way To Invest In Copper

eToro is our preferred platform for building any kind of investment portfolio. They launched in 2007 and have grown to have over 17 million users. eToro has advanced features for experienced traders, but they also have features to help beginner traders get started. Their wide range of helpful features make them a great option for any type of trader.

Security and Privacy

Since you’ll be putting your hard-earned money into your brokerage account, you’ll need to make sure that they are completely secure. Luckily, eToro is fully regulated by FCA and CySEC and fully meets all government regulations for security and privacy. The entire platform is SSL encrypted and they offer two-factor authentication as well, so you can rest assured that your investments are safe.

Fees and Features

The eToro platform has a very robust portfolio of features to choose from. One of their most popular features is Copy Trading, which allows you to copy top investors and their strategies. This is a great way for beginners to get started without having to constantly monitor the market. eToro also has an online trading academy with a huge range of content to learn from.

In addition to stocks and ETFs, eToro allows you to buy a huge range of cryptocurrencies, forex, and other securities. They are fully commission-free, but they do have some small fees. They charge a small spread fee for cryptocurrencies, as well as a $5 withdrawal fee and a $10 monthly inactivity fee if you don’t use your account.

eToro Fees

Fee Type Fee Amount
Deposit Fee $0
Withdrawal Fee $5
Commission Fee $0
Inactivity Fee (charged monthly) $10

 

Pros

  • Highly regulated and secure
  • No commission fees
  • Intuitive web and mobile apps
  • Unique CopyTrading feature

Cons

  • Does not offer MetaTrader support

67% of retail investor accounts lose money when trading CFDs with this provider.

2. AvaTrade – Reliable and Accessible Way to Invest in Copper

AvaTrade is a robust platform that has been around since 2006. They offer a wide variety of markets and securities to trade. In addition to traditional stocks and EFTs, AvaTrade offers forex trading and CFD trading. This is a particularly great platform for more experienced traders, as it offers a wide range of advanced features.

Security and Privacy

AvaTrade is highly regulated and very secure. They are monitored by top-level global regulators like ASIC and JFSA, just to name a few. The platform is fully SSL encrypted and comes with the option of McAfee secure integration.

Fees and Features

AvaTrade provides many different trading platforms to choose from depending on your unique needs. These include MetaTrader and WebTrader as well as their own platforms, AvaTradeGo and AvaSocial. AvaTradeGo allows you to access advanced trading features on your phone, while AvaSocial allows you to connect with other avid investors and discover new trading strategies. Experienced investors can also open a professional trading account to get access to even more advanced features.

This brokerage is particularly well-known for their customer service. They are accessible by phone or email 24/7. They currently don’t charge any commission fees, deposit fees, or withdrawal fees. However, they do charge small spreads on some trades. They also charge an inactivity fee of £50 after three months and £100 after 12 months.

AvaTrade Fees

Fee Type Fee Amount
Deposit Fee $0
Withdrawal Fee $0
Commission Fee $0
Inactivity Fee $50 after the first three months of inactivity, and $100 after one year of inactivity.

 

Pros

  • Highly regulated by global agencies
  • Professional accounts available
  • Great customer support

Cons

  • Inactivity fees are very high

67% of retail investor accounts lose money when trading CFDs with this provider.

3. Capital.com – Comprehensive Copper Trading For All Investors

Capital.com is another excellent brokerage platform for trading copper. They give investors the option to trade in many different markets and have features for advanced investors. However, they are also very committed to investor education and have a full library of content that beginner investors can use.

Security and Privacy

Capital.com is a fully secure exchange that is regulated by the FCA and CySEC. They also encrypt all of your data and are compliant with PCI data security standards. They even offer negative balance protection and margin closeouts for their customers.

Fees and Features

Capital.com has a wide variety of features available for both beginners and experienced traders. Investors can trade through the Capital.com web platform, TradingView, MetaTrader, or the Capital.com CFD trading app. Beginners can set up a practice account and access a huge library of educational content through their web guides as well as the Investmate app.

On top of this, Capital.com does not charge any commission fees, so you’ll only pay the spread on what you trade. There are also no deposit, withdrawal, or inactivity fees on this platform.

Capital.com Fees

Fee Type Fee Amount
Deposit Fee $0
Withdrawal Fee $0
Commission Fee $0
Inactivity Fee $0

 

Pros

  • No hidden fees of any kind
  • Practice account available for beginners
  • Integrates with TradingView and MetaTrader

Cons

  • No social trading features are available
  • Not available in the US
  • May not be advanced enough for experienced traders
  • Only 5 base currencies available

67% of retail investor accounts lose money when trading CFDs with this provider.

Invest In Copper – Broker Price Comparison

All three of the brokers we mentioned here offer competitive pricing. Here’s a side-by-side look at their fee structure.

Broker Commission Deposit Fee Withdrawal Fee Inactivity Fee
eToro 0% $0 $5 $10/month after one year
Capital.com 0% $0 $0 $0
AvaTrade 0% $0 $0 $50 after 3 months/$100 after one year

What Are The Different Ways To Invest In Copper?

There are a few different ways you can invest in copper. Each strategy has its own pros and cons, but all will benefit from increases in copper prices, which have been happening consistently over the past two years. Here are the three most common ways to invest in the copper industry.

Buying Stock In Copper Mining Companies

Arguably the easiest way to invest in copper is to buy stock in copper mining companies. There are hundreds of copper mining companies around the world, many of which are publicly traded. Most of these companies also mine for other metals, but some focus entirely on copper. Stocks are very easy to purchase through any brokerage. When you buy a share of a stock, you’re essentially owning a part of the company.

Many copper mining stocks are penny stocks, which means their shares are currently priced under $10 each. This isn’t necessarily a bad thing, but it does mean that these stocks can have lower trading volumes and therefore be more volatile than more expensive stocks. When looking at copper mining stocks, you’ll want to keep a close eye on any news that the company puts out and use that to time your investments strategically.

You’ll also want to take a look at the company’s business model. A mining company with established copper projects and consistent streams of revenue is typically going to be a more stable investment than a new mining company that is still in the exploration stage. Finally, you’ll want to consider whether or not the company pays dividends to their investors. Many companies will make these small payments to their investors either quarterly or annually. This means that dividends can serve as a source of passive income for investors.

Buying Shares Of ETFs With Copper Exposure

Another great option for beginner investors interested in copper is to buy shares of ETFs that have exposure to the copper industry. Like stocks, ETFs are very easy to buy and sell using any brokerage account.

ETF stands for exchange-traded fund. These funds are created by brokerages, hedge funds, or other institutional investors. They work the same way that stocks do – you can buy and sell shares, but instead of owing a part of one specific company, you’ll own a part of the ETF. These funds can track individual commodities like copper, or they can track a variety of different stocks. In the latter case, the stocks will usually all be in the same industry, like mining.

There are many ETFs with exposure to copper. If you want to invest entirely in copper and not in other metals, you can invest in the United States Copper Index, which tracks the price of copper futures directly. However, there are many other ETFs that track mining companies in general, which includes copper mining. These ETFs have the added benefit of portfolio diversity. Because they also have exposure to other metals, they are less likely to lose value even if the price of copper were to drop dramatically in the future.

The advantage of investing in ETFs is that they tend to be more stable than investing in individual stocks. Because these funds track multiple stocks at one time, they are usually less volatile than investing in the stock on its own. However, ETFs are still very easy to buy, which is why they are very popular among beginners.

Buying Copper Futures

If you want to invest in copper more directly, you can buy copper futures. The process of purchasing copper futures is much more complex than buying copper stocks or ETFs. As a result, these contracts are usually best left to experienced investors.

When you invest in futures, you are entering into a contract to buy or sell a certain commodity at some time in the future, hence the name. The investor is essentially betting on the price change of the commodity, which can either increase or decrease. These contracts are often very risky, but they can generate huge returns when successful.

When investing in futures, you’ll need to put up a portion of the overall investment to enter into the contract, called the initial margin. The contract will have an expiration date, at which point the brokerage usually settles the difference with cash, which can result in significant gains or losses. For example, if one pound of copper is $3 at the time of purchase and that price goes up to $5 per pound by the time the contract expires, you would have a return of $2 on each pound that you purchased.

In some cases, the futures contract wouldn’t be settled with cash, but would instead be settled with the delivery of an asset. Companies may do this if they need to purchase a commodity for manufacturing and want to lock a deal in at a specific price.

In order to trade futures, you’ll need to make sure your brokerage account supports these kinds of deals. Most advanced brokerages do have this option, but some tools that cater to retail investors may not. It’s also very important to make sure you understand the risks involved in purchasing futures and that you have a strategy moving forward.

Best Ways To Invest In Copper – Which Is Right For You?

These are the three most common ways to invest in copper. In the past, it was much more common to buy physical copper bullion and store it for long-term growth. While this is still an option, storage costs and logistics can be a headache, which means it isn’t a realistic strategy for most investors. These three strategies are much easier and can be done through a standard brokerage account. Let’s take a look at which strategy might be best for you.

Copper Mining Stocks

If you’re looking for a way to invest in copper quickly and easily, copper mining stocks are going to be a great choice for you. They are incredibly easy to buy and sell, and you can benefit from copper price increases without having to buy it directly. Additionally, many copper mining stocks pay dividends, which means they can serve as a source of passive income. In order to invest in copper mining stocks successfully, you will need to be willing to do a bit of research to learn more about each stock and determine whether or not it is a good investment.

Copper ETFs

Since ETFs work very similarly to stocks, they are another great option for beginner investors who want to build their portfolio quickly.  In fact, ETFs are sometimes even better for beginners than stocks because they are typically very low-risk. Because they are put together by reputable brokerages and institutional investors, there is also less research involved.

Looking to invest in ETFs? You’ve come to the right place! Our beginner’s guide will teach you everything you need to know about the best ETFs to invest in right now. So why wait? Start investing today with the best ETFs!

Copper Futures

Copper futures are very high-risk, high-reward. This means they are best for institutional investors who have a deep understanding of how they work. In order to invest in futures, you’ll need to be able to analyze price trends for commodities and make predictions based on what’s been happening in the market. This is something that can be quite tricky and takes a lot of practice to learn.

Is Copper A Good Investment?

Copper prices have gone up by over 20 percent in 2021, delivering great returns for investors who already had it in their portfolio. Copper remains in high demand and still has plenty of potential for investors moving forward in the years to come. It’s also considered a relatively ‘safe’ investment, as we need it to build many important parts of our infrastructure. Overall, now appears to be a good time to add copper to your investment portfolio.

Future Infrastructure Growth

We need copper in order to build many different types of infrastructure. This includes houses and residential infrastructure as well as commercial infrastructure. As a result, there is consistent demand for copper. The Biden administration is currently working on an infrastructure plan that would result in a huge array of new projects throughout the country, many of which would require copper. Notably, electric vehicle charging stations require copper, and we are likely to see many of them built throughout the country in the years to come.

Electronics

Copper is also used in high-end computer chips and other electronic devices. This is another reason why copper has been in such high demand this year. There has been a huge need for electronic devices as we transition to hybrid and remote work setups.

Low Supply

Additionally, copper has had a relatively low supply rate relative to its demand, which has only driven up the price even further. This low supply is due to COVID-19 shutdowns around the world in 2020 and early 2021, which limited production. Although copper mines have been open for several months now, it will take time for the world to fully recover from the shutdown.

What Are The Risks of Investing in Copper?

Although there are many potential benefits of investing in copper, there are some risks involved as well. It’s very important for investors to understand these risks before investing.

Expensive Operations

If you are investing in copper mining stocks, it’s important to note that this business model can be very expensive and difficult to set up. Copper mines take a long time to develop, and most mining companies will take on debt in order to set up the mines. As a result, it can take these companies a long time to be profitable, which can have an effect on their stock price.

Social and Ethical Concerns

There are also many social and ethical concerns that have arisen as a result of copper mining operations around the world. Many investors are concerned with labor practices within copper mines, as well as the environmental impact of copper mining.

How To Invest in Copper With eToro

Starting your investment portfolio can be tricky, but eToro streamlines the process to make things easier. Here’s how to invest in copper using the eToro platform.

Step 1: Open your eToro account

Setting up an eToro account is simple. All you need to do is click the “join now” button on their website to get started. You can even create an account using Facebook or Google.

Step 2: Verify your identity

In order to start trading, you will need to verify your identity on eToro. This is extremely important for security and regulatory compliance. To do this, you’ll need to provide photo ID and proof of address.

 

Step 3: Fund your account

Once your identity is verified, you will need to move money into your account in order to begin trading. This is very easy to do, as you can send money via credit or debit card, bank transfer, or a digital wallet like PayPal.

Step 4: Invest in copper

Once your account is set up, all you need to do is search for the copper stock or ETF you are interested in and start trading!

Conclusion

Copper has been a hot commodity recently, with significant price increases over the past year. If it continues on this trajectory, copper could be a very reliable addition to your portfolio moving forward. Whether you are investing in stocks, ETFs, or futures, investing in copper is a great way to make your portfolio more diverse.

#1 Broker to Invest in Copper – eToro

1
$50
Mobile AppYes
  • Buy over 800 stocks with 0% commission
  • Social trading network
  • Copy over 12 million traders and investors

FAQs

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About Sarah Foley PRO INVESTOR

Sarah Foley is a freelance content writer currently living in Chicago. She has written on finance, marketing, real estate, and a wide variety of other topics.