Commodities - Expand your investment portfolio by trading Derivatives on Spot Metals and Energies
The CFD on commodity is a form of tradable contract serving two main objectives, namely speculation and hedging.
|INSTRUMENTS||VALUE PER CONTRACT (STANDARD)||QUOTE DIGITS||CONTRACT SIZE PER LOT||MIN. LOT SIZE||AVERAGE SPREAD|
|Gold (XAUUSD)||USD 1||0.01||100||0.01||30 - 42 cents|
|Silver (XAGUSD)||USD 5||0.001||5000||0.01||3.0 - 3.5 cents|
|WTI Crude Oil (WTIUSD)||USD 10||0.01||1000||0.01||5.0 cents|
|Brent Crude Oil (BCOUSD)||USD 10||0.01||1000||0.01||5.0 cents|
|Natural Gas(GASUSD)||USD 30||0.001||30000||0.01||5.0 cents|
*Leverage on CFDs are capped at 1:100
S.A.M. Trade reserves the right to amend and make changes to the leverage policy according to market conditions and/or whenever a periodic review is conducted.
Last Updated: 3/1/2019
What is commodity trading?
Commodities are the basic building blocks of the global economy: natural resources or agricultural products that are traded on dedicated exchanges throughout the world, such as, Gold, Silver, Oil etc.
The supply and demand levels of a particular commodity are dependent on a wide variety of different factors:
- political events, or
- price of the dollar
All of this means that commodity prices can fluctuate significantly.
How to Trade Commodities with CFDs?
Today, investors have the option of trading commodities through CFDs. Trading CFDs on commodities has several unique features. These include lower capital requirements and being able to trade on both rising and falling markets. CFDs are considered an efficient way to trade popular commodities - such as Gold or Silver, Oil or Natural Gas, due to higher leverage, which enables a trader to use less capital to gain greater exposure to an underlying instrument.
The main advantage of trading commodities with CFDs is the lower cost of barriers to entry. The margined nature of trading contracts for difference makes it possible to take both long and short positions with just a fractional margin requirement. In other words, this means traders can take on a deeper exposure to a commodities position than may otherwise have been the case, oftentimes requiring as little as 5% to cover the margin requirement.
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