Commodities

Commodities

Commodities are the natural resources of the world, which after processing, become the integral parts of manufacturing for industrial and domestic consumption. The intricacies of supply of these physical commodities combined with the complex factors influencing their demand create constant fluctuations in the price. These fluctuations provide the type of opportunities that traders can take advantage of.

HV Markets offers Commodity CFD trading in some of the most popular products in the world including Gold, Silver, Brent Oil and West Texas Intermediate oil. Gold is traded as a safe haven commodity particularly as a hedge against inflationary pressures or in times when stock market prices have become unstable and traders are looking to diversify their portfolio. Silver is likewise a safe haven commodity but to a lesser extent than gold. It is also being increasingly used in industry and technology which in turn creates interest in it as a financial asset. Like Forex, there is no centralised exchange for gold or silver prices so trading is available 23 hours a day 5 days a week. Needless to say oil is of major importance in the energy markets which are in turn vital to global economies. The geo-political events of recent years have created a surging interest and increased volatility in oil prices and present many opportunities for traders. The trading of these Commodity CFDs is the same as it is for Forex pairs , on the same platform, from the same trading account and just a simple in order execution action.

Commodity CFDs differ from Futures trading in that there is no physical delivery of the commodity, just a cash settlement of the difference between the opening price and the closing price of the contract, and also there are no Exchange commissions to be paid.

Benefits

  • No Futures Exchange commissions.
  • No physical delivery of the commodity
  • Trading is from the same account and on the same platform as Forex trading.
  • CFD Commodity Trading allows for profitable trading no matter which direction the market prices are going, up or down.
  • The margin required for trading Commodity CFDs is much lower than for a futures contract, so less capital is required to trade.

Commodity Trading Example

1 Gold is trading at 1305.00/1305.50
2 You decided to buy 1 contract (100 ounces) at 1305.50
3 One hour later gold is trading at 1320.00/1320.50
4 One hour later gold is trading at 1320.00/1320.50
5 Your profits = (1320.00 - 1305.50) * 100
6 Net profits = 1450 USD