Commodities - Market Information

how to work out

the NTR/Margin for a commodities trade

The Notional Trading Requirement (NTR, Initial Margin or Margin) is the amount of money we require for you to open a bet in a specified product.

The deposit factor will normally be displayed as a percentage and can be found in the Commodities market information pages.

For example, placing a £10 trade on Gold at 1220.5 would require £6102.5 of NTR, as the deposit factor is 5% (£10 x 12205 x 5%).

A trade with a Stop attached: 
For professional clients, the NTR required can sometimes be reduced by using a guaranteed or non-guaranteed stop. For details of how this works, please contact a member of our trading desk.

Stops cannot be used to reduce NTR if you have a Retail Account.

Offsetting
If you have a ‘Force Open’ position or an opposing trade in both, the futures and daily you will only be charged NTR on the trade with the larger stake. This is because the risk on the two trades offset each other.

HOW TO

roll a COMMODITY trade

Any commodity ‘daily futures’ trade will automatically roll every weekday at 9pm up until the final trading day of the existing contract.

how to understand

the close out level for commodity trades

We operate an automatic close out policy which means that some or all of your positions may be closed without notice to you if your account reaches the Close Out Level. Please see Rule 22 of our Customer Agreement. The Close Out Level is reached if your aggregate Available Balance is a negative figure.

You can reduce the risk of your account reaching the Close Out Level by ensuring you have sufficient cash in your account, or by reducing some of your positions – this is particularly important in volatile markets or if you are travelling.

FINDING OUT

WHEN MY FUTURES BET WILL BE ROLLED

Trades will be automatically rolled by us during the final trading day of the existing contract, if your preferences are set correctly and there are sufficient funds in your account to pay for any charges in the rollover.

When being automatically rolled, your closing price on the expiring contract will be the Bid if you are long and the Offer if you are short. These prices will be taken at the time of the roll and your P&L whether positive or negative will be crystallised. The opening price in the next quarterly contract will be the Bid if you are short or the Offer if you are long.

FINDING OUT IF 

A stop will be rolled with my futures bet

Your Stop will be rolled over and adjusted for fair futures value. Therefore, your Stop will not be at the same level as previously, but the risk attached to your trade will remain constant.

how to 

go long and short in the same market

When placing your second trade on the same market, simply check the ‘Force Open’ box on the trade ticket.

Also, it is possible to open a ‘Force Open’ position via an order. To do so, place an opening order in the opposite direction to your existing position and once the order is filled it will be a ‘Force open’ position.

how to

work out what a Gold trade equates to in the futures market

Our Gold price represents the cost of one Troy ounce in US dollars.

how to

work out what a Silver trade equates to in the futures market?

Our Silver price represents the cost of one Troy ounce in US cents.

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Gold

Gold has always been a symbol of wealth due to its look and rarity and is by far the most popular of the precious metals when it comes to investment, trading or financial trading.

Gold futures are primarily traded on the New York Commodities Exchange (COMEX), a subsidiary of the CME Group (Chicago Mercantile Exchange). Its price is quoted in US dollars per ounce.

Gold is renowned for holding its value and is regarded as a safe haven for investors to turn towards to diversify their portfolio and offer protection during times of economic uncertainty.

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silver

Silver had been regarded as a form of money and a store of value for more than 4,000 years until the end of the silver standard in 1971 when the metal lost its role as legal tender in the United States.

Now silver is still commonly used as a form of investment, although is not anywhere near as popular as gold in this regard. It is also used in industrial applications such as in conductors. Silver futures are primarily traded on the New York Commodities Exchange (COMEX), a subsidiary of the CME Group (Chicago Mercantile Exchange), and its price is quoted in cents per troy ounce.

In a similar manner to gold, silver is seen as a commodity to turn to during times of economic uncertainty. While silver often tracks gold prices, it can often be much more volatile.

 

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Light crude

Oil is one of the world’s most critical and valuable natural resources, with the price of the commodity affecting consumers every day by influencing the cost of certain goods and affecting heating, petrol or gasoline prices.

Crude oil is the world’s most actively traded commodity and the two most heavily traded contracts on crude oil are the Brent Crude Oil contract and the West Texas Intermediate (WTI) Light Sweet Crude Oil contract.

WTI Light Crude oil is crude oil of a very high quality, mainly refined in the Midwest and Gulf Coast region of the United States. It is considered the major benchmark of crude oil in the Americas.

Futures contracts of WTI Crude Oil are traded on both the InterContinental Exchange (ICE) and New York Mercantile Exchange (NYMEX) and in Dubai by the Dubai Gold and Commodities Exchange. Light Crude futures are traded in units of 1,000 US barrels (42,000 gallons) with prices quoted in US dollars.

 

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brent crude

Crude oil is the world’s most actively traded commodity and the two most heavily traded contracts on crude oil are the Brent Crude Oil contract and the West Texas Intermediate (WTI) Light Sweet Crude Oil contract.

Brent Crude, or Brent blend, is a combination of oil from 15 different fields in the Brent and Ninian systems in the North Sea. Although it could be said the oil is ‘light’ and ‘sweet’, it is not thought of as ‘light’ or as ‘sweet’ as West Texas Intermediate. It is ideal for making gasoline and middle distillates, both consumed in large quantities in Northwest Europe.

Brent Crude gets its name from the naming policy of operating companies, which originally named its fields after birds and in particular the Brent Goose. Brent Crude is generally considered as the major benchmark for other crude oils in Europe or Africa and prices for other crude oils are often based on a differential to Brent.

Until 1995 the commodity was traded on the International Petroleum Exchange in London, but are now traded on the electronic Atlanta-based Intercontinental Exchange Inc. (ICE), previously known as the Board of Trade of the City of New York (NYBOT).

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copper

Copper is a primary industrial metal used mainly in construction. Just like gold and silver, copper can also be traded on the financial markets with futures prices often considered an accurate barometer of economic growth.

Copper futures are primarily traded on the New York Commodities Exchange (COMEX), a subsidiary of the CME Group (Chicago Mercantile Exchange), and its price is quoted in US cents per pound. Although not as heavily traded or as valued as gold, copper is 100% recyclable and has hit close to record highs in recent years making it a target for theft either from underground communication cables or derelict buildings.

 

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Palladium

Palladium and platinum are the most widely used of the six platinum group metals, which also include rhodium, ruthenium, osmium and iridium. They are used in manufacturing processes in a range of industries due to their catalytic functions, conductivity and resistance to corrosion.

Palladium is often found in catalytic converters as it helps lessen the impact of certain gases on the environment and is found extensively within computers and televisions. In the future, palladium will play a key role within hydrogen fuel cells.

Palladium futures are primarily traded on the New York Commodities Exchange (COMEX), a subsidiary of the CME Group (Chicago Mercantile Exchange), and its price is quoted in US dollars per troy ounce.

 

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Platinum

Platinum and palladium are the most widely used of the six platinum group metals, which also include rhodium, ruthenium, osmium and iridium. They are used in manufacturing processes in a range of industries due to their catalytic functions, conductivity and resistance to corrosion.

Platinum has more industrial uses than gold and silver combined and is also used in jewellery – where it is known as white gold – because of its resistance to wear and tarnishing.

Platinum futures are primarily traded on the New York Commodities Exchange (COMEX), a subsidiary of the CME Group (Chicago Mercantile Exchange), and its price is quoted in US dollars per troy ounce.

 

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Natural gas

Natural gas is known as a very clean fuel which is used extensively around the world. A bulk of natural gas is in Russia and in the Middle East. It is predominately used in energy production.

Natural Gas futures are traded primarily on the New York Mercantile Exchange (NYMEX), a subsidiary of the CME Group (Chicago Mercantile Exchange), with prices quoted in US dollars per million British thermal units.

 

 

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cocoa

Cocoa is used in a variety of culinary applications and is derived from the cacao tree. Much of cocoa comes from West Africa and part from South America, where it was even once used as a form of currency.

Cocoa is the world’s smallest soft commodity market and is traded predominantly on the InterContinentalExchange (ICE). Cocoa prices are quoted in US dollars per metric ton.

Price movements can sometimes be volatile with up to 100 point movements per day occurring with regularity.

When trading on cocoa it is worth considering several major influences on the price such as the prevalence of disease, which can destroy cocoa crops, political instability in cocoa growing countries within West Africa or South America and the demand of cocoa by other countries around the world.

As cocoa’s price is quoted in US dollars, any fluctuations in the value of the American currency can also influence the price of cocoa.

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corn

Corn is used primarily to feed livestock, but also has other uses in food production, bio fuels and even within commercial applications such as glue. The United States produces more than 50% of the world’s total harvest as the majority of the crops in the United States are genetically modified.

Corn futures are primarily traded on the Chicago Board of Trade (CBOT), a subsidiary of the CME Group (Chicago Mercantile Exchange), with prices quoted in cents per bushel.

Price movements can sometimes be volatile with up to 100 point movements per day occurring with regularity.

When trading on corn it’s worth considering several major factors which can influence the price. The demand for corn comes mainly from livestock feed and bio fuel production so it is important to monitor the demand within these markets. It is important to monitor weather, disease and other factors which could reduce or improve the size of the harvest. As corn’s price is quoted in US dollars, any fluctuations in the value of the American currency can also influence the price of corn.

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soyabeans

Soyabeans are used as protein feed for livestock, as a meat-alternative and in other products such oils. The US is a major producer of soyabeans, along with Brazil and Argentina.

Soyabean futures are primarily traded on the Chicago Board of Trade (CBOT), a subsidiary of the CME Group (Chicago Mercantile Exchange), with prices quoted in cents per bushel.

When trading on soyabeans take care to consider several major influences which can affect the price. Disease such as soyabean rust can damage crops, and weather can have major consequences on the size of the crops. Demand in the future may be spurned further by an increasing reliance on bio fuels, such as that produced from the soyabean. As soyabean’s price is quoted in US dollars, any fluctuations in the value of the American currency can also influence the price of soyabeans.

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sugar

Sugar is used as a natural sweetener for food and drinks and increasingly used to produce ethanol, a biofuel. Sugar can be produced from sugar beet or sugar cane. Most production comes from Brazil, the United States and China.

Sugar #11 futures are primarily traded on the InterContinentalExchange (ICE) with prices quoted in cents per pound.

When trading on sugar there are several major factors to monitor which can influence the price. These would include the demand for alternatives to sugar such as artificial sweeteners, the demand for bio fuel, which is inversely correlated to the price of crude oil, and political influences such as subsidies. As sugar’s price is quoted in US dollars, any fluctuations in the value of the American currency can also influence the price of sugar.

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wheat

Wheat is used in a variety of ways to produce livestock feed and various different foodstuffs from biscuits to flour. It is also used to distil alcohol. The biggest wheat producer is China, but Russia, Canada and the US produce sizable amounts.

Wheat futures are primarily traded on the Chicago Board of Trade (CBOT), a subsidiary of the CME Group (Chicago Mercantile Exchange), with prices quoted in cents per bushel.

When trading on wheat there are several major influences to consider which may affect the price. These would include the demand for biofuels, the availability and price of substitute products (especially when it comes to livestock pricing) and any diseases which could damage crops. As wheat’s price is quoted in US dollars, any fluctuations in the value of the American currency can also influence the price of wheat.