In addition to our vast range of commodity futures, we now offer commodities with no expiry points
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Our new commodity product enables you to take a short-term view on 26 key commodity markets.
The new offering works in the same way as an index CFD. And just like an index position, you’ll pay a funding charge for holding your commodity position overnight.
As there are no fixed expiries, we are also able to offer continuous charting on these markets. This means your technical analysis will be available as long as you want it. We have used past data to backdate our charts for the last three to five years, so you can get an accurate historical look.
Enjoy some of the best commodity spreads on the market with no insurance costs, including on gold and oil
As a continuous stream, your profit/loss will be clearer over the position's lifetime and with a daily funding charge for holding a position overnight, there's no need to close on expiry and open a new position
Take advantage of technical analysis, available as long as you want, and backdated price charts for the last three to five years
In the absence of a continuously traded underlying market, we have created an algorithm to derive a price from the forward curve of each commodity. It will automatically calculate and apply day-to-day funding requirements.
To price these markets we use two futures contracts on the underlying commodity. For each market we look at the contracts that have sufficient liquidity, then use the two with the nearest expiry dates.
The one that has the closest expiry date is called the front month contract, and is labelled ‘A’ in our diagram. The one with the second-nearest expiry date is called the back month contract and is labelled ‘B’.
As soon as the previous contract expires, the price we offer is equal to the price of ‘A’. When ‘A’ expires, ‘B’ becomes the front month contract, and our price is equal to the price of ‘B’.
In between these two expiry points, our price gradually moves from the price of ‘A’ towards the price of ‘B’. Depending on the commodity, the price of ‘B’ can be higher or lower than the price of ‘A’.
Trade CFDs on a wide range of popular and niche metals, energies and softs
Use our risk management tools to manage your positions even in volatile times
Trade CFDs to gain full exposure with just a small initial deposit, but remember with leverage comes increased risk
Trade on Spot Gold from 0.4 points, Spot Silver from 3 points and US Light Crude from 6 points
Below are our contract spreads for CFDs and MT4. Download MT4 to get faster execution and greater automated trading (only available for gold and silver).
|Spot Silver (5000oz)||2.5||2.5|
|Oil - US Crude||3.0||n/a|
|Oil - Brent Crude||3.0||n/a|
|Full CFD details||Full MT4 details|
|Market and price||
Spot Gold 1248.06/1248.46
Buy at 1,248.46
1 standard contract
Equals US$100 per point
Margin = Number of contracts x value of one contract x level of spot gold (mid) x margin rate (0.7%)
1 x 1,248.26 x US$100 x 0.7% = US$873.78
|What happens next?||
Spot Gold rallies 10 points into the next day. This position is held through 10pm London time, when funding is calculated.
Funding = size x (tom-next rate + admin fee of 0.3% pa)
US$100 x 0.12 = US$12
1258.06 / 1258.46
Sell at 1,258.06
1,258.06 - 1,248.46 = 9.6
Value per point = US$100
9.6 x US$100 = US$960
0.4 point IG spread (included)
Funding cost = US$12
If the market dropped 10 points instead (with a spread of 0.4 points):
US$1,040 + US$12
Net loss = US$1,052
Commodities are the basic building blocks of the global economy. They are natural resources traded on dedicated exchanges around the world.
There are two types of commodity – soft and hard. Soft commodities are typically agricultural like wheat or sugar, whereas hard commodities are metals or energies like silver and gas.
The production and consumption of commodities depends on many factors, including:
As a result of all these factors, commodity prices can fluctuate significantly.
How and where commodities are traded
Commodities are traded on a number of exchanges that specialise in particular markets.
Commodities are also generally traded as futures contracts. These are simply agreements to trade an asset at an agreed price and date in the future. This enables you to trade the contracts themselves without ever having to own the underlying asset.
Watch Sara explain the basics of
commodities trading in less than two minutes