Commodities

This works in the same way as an index CFD. Just like an index position, you’ll pay a funding charge for holding your commodity position overnight.

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.

With continuous charting, your technical analysis will be available as long as you want it. IG have used past data to backdate our charts for the last three to five years, so you can get an accurate historical look.

Yes – investors often buy or sell commodities to help manage their risk. 

In a balanced portfolio, commodities provide a hedge against downward movements in other securities, as they tend to move in the opposite direction, or an unconnected direction, to certain stocks and bonds.

No – but you can get exposure to them by trading share CFDs in companies that operate in the relevant field. 

Emerging commodities are commodity markets that some investors expect to be booming in the next few years, but which are not currently available to trade as commodity futures (for example, water and ethanol). The only way to trade these products is by trading stock in companies that operate in the relevant field.

Commodities can be used as a natural hedge against inflation. If rapid inflation seems imminent, you may see commodity prices rising very quickly – they may even provide the first sign of inflation. This is because people will be moving money out of investments that don’t offer a hedge against inflation and into the commodity markets, to protect their assets.