CFD Commodities is a Complex Trading instruments which can be very profitable and Risky.
Before diving into it , we should have a full understanding of all the Commodities Terms/ Cost Involves / risk Management etc.
Check out CFD Commodities Profit and Loss Calculator
Commodities Available for trade are divided into Several Categories listed below
- Energy
- Metals
- Grains/ Seeds
- Soft Market
The Tables below Show Some of the Mostly traded Commodities base on different Cateorgories
Energy
| Commodities | Market Offer |
| Crude Oil (CL) | Nymex |
| E Mini Crude Oil (QM) | Nymex |
| RBOB Gasoline (RB) | Nymex |
| Heating Oil | Nymex |
| Natural Gas | Nymex |
Metals
| Commodities | Market Offer |
| Gold | Comex |
| Silver | Comex |
| Platinum | Globex |
| Palladium | Globex |
| Copper | Globex |
| Aluminium | Globex |
Grains & Seeds
| Commodities | Market Offer |
| Corn | Globex |
| Soya | Globex |
| Wheat | Globex |
| Oat | Globex |
Soft Market
| Commodities | Market Offer |
| Cocoa | ICE |
| Coffee | ICE |
| Cotton | ICE |
| Sugar | ICE |
| Canola Oil | ICE |
| Palm Oil | Globex |
CFD Commodities Parameters
There are few CFD commodities Trading Parameters that you might need to fully understand and Clear with
| Parameters | Meaning |
| Contract Spread | Spread is a Difference between the Bid/ Ask Price .Broker Will Normally quote Price in the Form of Spread. This means that the price to buy a Commodities will be slightly higher than market, while the price to sell will always be slightly below the market |
| Ticks | Smallest amount of a Commodities Price Quote can change |
| Value per Tick | Value in Currency Term Normally USD for 1 Tick |
| Point | Smallest amount of a Commodities Price can change that can occur on the left side of the decimal Point |
| Value per Point | Value in Currency Term Normally USD for 1 Point |
| Contract Size | Size of the Commodities equivalent to One Contract Example Oil: 1 Contract is equivalent to 1000 Barrels |
CFD Commodities Example ( Crude Oil Parameters)
| Parameters | Meaning |
| Contract Spread ( Varies By Broker ) | USD 0.03 = 3 Tick |
| Ticks | 1 Tick = 0.01 |
| Value per Tick ( Varies By Broker ) | USD 10.00 |
| Point | 1 point = 1 x 100Ticks |
| Value per Point | 1 point = 1 x 100Ticks 1Tick = USD 10.00 1 Point = USD 10.00 x100 = USD 1000 |
| Contract Size | 1000 Barrels |
Commodities Example ( Heating Oil Parameters)
| Parameters | Meaning |
| Contract Spread ( Varies By Broker ) | USD 0.0015 = 15 Tick |
| Ticks | 1 Tick =0.0001 |
| Value per Tick ( Varies By Broker ) | USD 4.20 |
| Point | 1 point = 1 x 10,000 Ticks |
| Value per Point | 1 point = 1 x 10,000Ticks 1Tick = USD 4.20 1 Point = USD 4.20 x 10,000 = USD 42,000 |
| Contract Size | 42,000 Gallons |
Commodities Example ( Gasoline Parameters)
| Parameters | Meaning |
| Contract Spread ( Varies By Broker ) | USD 0.0015 = 15 Tick |
| Ticks | 1 Tick =0.0001 |
| Value per Tick ( Varies By Broker ) | USD 4.20 |
| Point | 1 point = 1 x 10,000 Ticks |
| Value per Point | 1 point = 1 x 10,000Ticks 1Tick = USD 4.20 1 Point = USD 4.20 x 10,000 = USD 42,000 |
| Contract Size | 42,000 Gallons |
Commodities Example ( Natural Gas Parameters)
| Parameters | Meaning |
| Contract Spread ( Varies By Broker ) | USD 0.0015 = 1.5 Tick |
| Ticks | 1 Tick =0.001 |
| Value per Tick ( Varies By Broker ) | USD 10.00 |
| Point | 1 point = 1 x 1000 Ticks |
| Value per Point | 1 point = 1 x 1000Ticks 1Tick = USD 10.00 1 Point = USD 10.00 x 1000 = USD 10,000 |
| Contract Size | 10,000 MTBU |
Commodities Example ( Gold Parameters)
| Parameters | Meaning |
| Contract Spread ( Varies By Broker ) | USD 0.34 = 3.4 Tick |
| Ticks | 1 Tick =0.1 |
| Value per Tick ( Varies By Broker ) | USD 10.00 |
| Point | 1 point = 1 x 10 Ticks |
| Value per Point | 1 point = 1 x 10Ticks 1Tick = USD 10.00 1 Point = USD 10.00 x 10 = USD 100 |
| Contract Size | 100 Ounce |
Commodities Example ( Silver Parameters)
| Parameters | Meaning |
| Contract Spread ( Varies By Broker ) | USD 0.029 = 3.4 Tick |
| Ticks | 1 Tick =0.005 |
| Value per Tick ( Varies By Broker ) | USD 25.00 |
| Point | 1 point = 1 x 200 Ticks |
| Value per Point | 1 point = 1 x 200Ticks 1Tick = USD 25.00 1 Point = USD 25.00 x 200 = USD 5,000 |
| Contract Size | 5000 Ounce |
Commodities Example (Platinum Parameters)
| Parameters | Meaning |
| Contract Spread ( Varies By Broker ) | USD 1.1 = 11 Tick |
| Ticks | 1 Tick =0.1 |
| Value per Tick ( Varies By Broker ) | USD 5.00 |
| Point | 1 point = 1 x 10 Ticks |
| Value per Point | 1 point = 1 x 10Ticks 1Tick = USD 5.00 1 Point = USD 5.00 x 10 = USD 50 |
| Contract Size | 50 Ounce |
Commodities Example ( Palladium Parameters)
| Parameters | Meaning |
| Contract Spread ( Varies By Broker ) | USD 0.65 = 13 Tick |
| Ticks | 1 Tick =0.05 |
| Value per Tick ( Varies By Broker ) | USD 5.00 |
| Point | 1 point = 1 x 20 Ticks |
| Value per Point | 1 point = 1 x 20Ticks 1Tick = USD 5.00 1 Point = USD 5.00 x 20 = USD 100 |
| Contract Size | 100 Ounce |
Commodities Example ( Corn Parameters)
| Parameters | Meaning |
| Contract Spread ( Varies By Broker ) | USD 0.25 = 100 Tick |
| Ticks | 1 Tick =0.0025 |
| Value per Tick ( Varies By Broker ) | USD 12.50 |
| Point | 1 point = 1 x 400 Ticks |
| Value per Point | 1 point = 1 x 400Ticks 1Tick = USD 12.50 1 Point = USD 12.50 x 400 = USD 5000 |
| Contract Size | 5000 Bushels |
Commodities Example ( Soya Bean Parameters)
| Parameters | Meaning |
| Contract Spread ( Varies By Broker ) | USD 1.00 = 400 Tick |
| Ticks | 1 Tick =0.0025 |
| Value per Tick ( Varies By Broker ) | USD 12.50 |
| Point | 1 point = 1 x 400 Ticks |
| Value per Point | 1 point = 1 x 400Ticks 1Tick = USD 12.50 1 Point = USD 12.50 x 400 = USD 5000 |
| Contract Size | 5000 Bushels |
Commodities Example ( Wheat Parameters)
| Parameters | Meaning |
| Contract Spread ( Varies By Broker ) | USD 0.25 = 100 Tick |
| Ticks | 1 Tick =0.0025 |
| Value per Tick ( Varies By Broker ) | USD 12.50 |
| Point | 1 point = 1 x 400 Ticks |
| Value per Point | 1 point = 1 x 400Ticks 1Tick = USD 12.50 1 Point = USD 12.50 x 400 = USD 5000 |
| Contract Size | 5000 Bushels |
Commodities Example ( Oat Parameters)
| Parameters | Meaning |
| Contract Spread ( Varies By Broker ) | USD 0.25 = 100 Tick |
| Ticks | 1 Tick =0.0025 |
| Value per Tick ( Varies By Broker ) | USD 12.50 |
| Point | 1 point = 1 x 400 Ticks |
| Value per Point | 1 point = 1 x 400Ticks 1Tick = USD 12.50 1 Point = USD 12.50 x 400 = USD 5000 |
| Contract Size | 5000 Bushels |
Commodities Example ( Cocoa Parameters)
| Parameters | Meaning |
| Contract Spread ( Varies By Broker ) | USD 6.00 = 6 Tick |
| Ticks | 1 Tick =1.00 |
| Value per Tick ( Varies By Broker ) | USD 10.00 |
| Point | 1 point = 1 Ticks |
| Value per Point | 1 point = 1 Ticks 1Tick = USD 10,00 1 Point = USD 10.00 x 1 = USD 10 |
| Contract Size | 10 Metric Tonnes |
Commodities Example ( Coffee Parameters)
| Parameters | Meaning |
| Contract Spread ( Varies By Broker ) | USD 0.15 = 3 Tick |
| Ticks | 1 Tick =0.05 |
| Value per Tick ( Varies By Broker ) | USD 18.75 |
| Point | 1 point = 20 Ticks |
| Value per Point | 1 point = 20 Ticks 1Tick = USD 18.75 1 Point = USD 18.75 x 20 = USD 375 |
| Contract Size | 375lbs |
Commodities Example ( Cotton Parameters)
| Parameters | Meaning |
| Contract Spread ( Varies By Broker ) | USD 0.06 = 6 Tick |
| Ticks | 1 Tick =0.01 |
| Value per Tick ( Varies By Broker ) | USD 5.00 |
| Point | 1 point = 100 Ticks |
| Value per Point | 1 point = 100 Ticks 1Tick = USD 5.00 1 Point = USD 5.00 x 100 = USD 500 |
| Contract Size | 500 Bushels |
Types of Trade ( Long / Short)
- Long -> You expect the Commodities Price to Appreciate .
- Short-> You expect the Commodities Price to depreciate.
Margin
The amount of money that a trader needs to put forward in order to open a CFD commodities trade
When trading CFD Commodities on margin, you only need to pay a percentage of full value vs the position you open.
Margin= Number Of Contract x Commodities Price x Value per Point x Margin Percentage
Example :
Gold Price with Spread : USD $ 1890.89
Number of Contract : 1
Value Per Point : USD$100
Margin Required : 20% of the Trade
Margin= 1 x 1890.89 x 100 x 20%
Margin Required = USD 37817.80
Intraday
(tom-next rate+ 0.5% pa admin fee) x deal size
Overnight Funding
(P3 – P2) ÷ (T2 – T1)
T1 = expiry date of the previous front future
T2 = expiry date of the front future
P2 = price of front future
P3 = price of next future
Basis =(P3 – P2) ÷ (T2 – T1)
Brokerage charge = P3 x Brokerage Commission % ÷ 365
Profit and Lost Calculation
Long Profit and Loss Calculation
Profit Loss =[( Close Position Price – Open Position Price) x Number Of Contract x Value Per Point ] – Borrowing cost – Currency Conversion Fee
Short Profit and Loss Calculation
Profit Loss = [ (Open Position Price – Close Position Price) x Number Of Contract x Value Per Point] – Borrowing cost – Currency Conversion Fee
