The most important factor to think about while trading commodities is liquidity. The ease with which you may purchase or sell a commodity is determined by its liquidity. Since there is usually someone prepared to take the other side of a trading position, a liquid market is typically linked with comparatively reduced risk. A well-established market of buyers and sellers is often present for a quality commodity at all times.

A commodity with high liquidity also has a lower chance of slippage. When bid-offer spreads are large, a phenomenon known as "slippage" occurs. This is particularly prevalent in commodities with low levels of liquidity. What sets the most traded commodities apart from the others is their liquidity. Which brings us to a crucial query.