Commodities
Spreads betting on commodities are on the increase as many professional investors are taking advantage of the similar levels of volatility, which they are used to, from the Spot FX investing markets. Combined with the accessible exposure available in the commodities market it makes for a very interesting investment opportunity where there is scope for an investor to make a lot of money.
Equally as these markets are very aggressive there is a possibility of losing much more money than the original spread betting trades that you place on them, however there is also the unrivalled potential to make impressive gains through leveraged spread trades
ETX Capital offers spread bets in all major global commodity product areas giving you access to a wide range of commodity markets such as:
- Precious Metals
- Energies
- Softs
- Agriculture
Trading Example
An ETX Capital client thinks that the price of oil is going to rise as they believe demand will increase this coming winter. As a result, they decide to place a spread bet trade to buy WTI Crude Oil futures for December expiry.
The client looks at the price on the ETXCapital.co.uk website and can buy at 80.05 or sell at 79.95. The customer buys £5 per tic of the Dec Crude Oil future at a price of 80.05.
Typically commodity futures expire in the month preceding the delivery month i.e. the Dec contract will expire mid-November.
The client holds the spread bet for 2 weeks in which time the market has steadily climbed higher. The client is making a nice profit but believes that due to a scheduled OPEC meeting the price could come back lower so its time to close the position. The market is now trading at a price of 83.70 and decides that they would like to take the profit on this trade. The client is offered a price on the website of 83.70 to sell or 83.80 to buy.
The client needs to sell to close the bet so sells £5 per tic at 83.70. The profit is 365 tics (83.70 - 80.05) x £5 = £1825.00. However, had the market fallen then the client would have incurred a loss, and as with all spread bets there is a chance that the losses made can outweigh the initial traded stake.
Both daily and future spread trades are available
- Brent Crude
- Corn
- London Coca
- Nymex Crude
- Platinum
- Robusta Coffee
- Soybean Meal
- Soybean Oil
- Soybean
- Wheat
- Gold
- Silver
- Copper
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