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Commodity Spread Betting

Commodities markets are the original markets where raw or primary products are exchanged. Commodities are amongst the world’s most popular products traded on futures exchanges and are also available in spread betting. Retail traders now have the ability to trade such products without having to receive physical delivery but instead trade them purely for financial purposes. With such large popularity in global precious metals, agriculture and crude oil online trading platforms offer all its clients access to this array of products.

Transparent Commodities

Very similar to our Index products online trading platforms gives our clients access to the world’s largest futures markets to ensure our commodity spreads are completely transparent. Gain access to crude oil, precious metals and agriculture with real-time depth and the tightest spreads available. Commodity markets are open nearly 24 hours a day, usually with two small breaks and then closed for the weekend. online trading platforms offers access to commodities on the following leading futures exchanges:

  • Sydney Futures Exchange
  • CME

How Commodity Spread Betting Works

online trading platforms offers Commodities, precious metals, crude oil and agriculture products on the globe’s largest futures markets. All commodity spreads are financially settled, there are no deliverable. This means no trader can physically take or give the commodity they trade but instead settle the contract like a traditional share with the difference between the opening and closing prices exchanged. Like all spread betting products, if a trader believed the price of crude oil was going up they would bet a certain amount of pounds per point on crude oil contracts only outlaying a small margin. Each contract consists of 500 barrels of crude oil and therefore each dollar the price of oil goes up, the amount bet per point will be gained and each dollar it drops, the amount per point will be lost. Like all index products, commodity spreads are short sellable for our traders ability to profit from falling markets as well.

Selling Spot Gold

You decide that the price of gold is going to fall over the next week or so based on your research. In this case to make a profit you have decided to short 2 GOLD contracts. The gold contract is 100 ounces. Therefore for each $1 movement in the price of the contract, your profit will rise or fall by $100 per contract.

The current quote for GOLD is 1600.2 – 1600.5. You wish to sell 2 contracts at the offered Bid of 1600.2.

Opening Position: (100 x 1600.2) x2 = -$320,040

The next week gold has fallen and the current quote is 1575.0 – 1575.2. The trader decides to buy 2 contracts at the asking price of 1575.2 to close out the short position.

Closing Position: (100 x 1575.2) x2 = -$315,040

Profit/Loss = $5,000

Make note that the standard commission on this would have been $40 to open the position and $40 to close the position. There are no financing implications associated with online trading platforms commodity products.

Therefore net profits would have been $4,920.