Guide to Commodities Spread Betting

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Financial Spreads: Spread Betting and CFD Trading

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Commodities Spread Betting

Commodities Spread Betting


A guide to spread betting on commodities:

Where Can I Get Live Commodities Prices?

FinancialSpreads provides investors with real time pricing on more than a thousand financial spread betting markets including the commodity markets listed above and a large variety of shares, currency markets and stock market indices.

Where Can I Spread Bet on Commodities?

FinancialSpreads offer spread betting and CFDs on over a thousand markets including precious metals and energies:

Tax-Free* Commodities Spread Betting

Financial spread betting, including commodities spread betting, is currently tax-free in the UK. Note though, tax treatment does depend upon the individual circumstances of each client and can change in the future.

Indicative Prices

Prices shown are delayed by 15 minutes, indicative only, and subject to our website terms and conditions.


Commodities Demo Accounts

FinancialSpreads lets traders practice their commodity trading via a Demo Account.

The Demo Account comes with a variety of commodities like gold, silver, both Brent crude oil and US crude oil as well as a large number of indices and forex markets.

Our Demo Account doesn't just cover financial spread betting, you can also practice your CFD trading.

Where Can I Get Live Commodities Charts?

Investors can access real time trading charts for commodities and more than 1,000 other CFD and financial spread betting markets.

As well as different chart types, the package comes with a variety of benefits:
Example commodity chart:

Commodities Spread Betting Charts



How to Spread Bet on Commodities

In the example below we look at the popular Brent Crude Rolling Spot market.

For more worked commodities trading examples see: Looking at Brent crude, let's say that you sign into Financial Spreads and see the current price at:

  Brent Crude Rolling Spot Sell

6139.5
Buy

6143.5


Here's a brief example of how it works:

Spread Betting Market:Brent Crude Rolling Spot
The Spread:6139.5¢ - 6143.5¢
How the Spread Works:You can bet on the Brent Crude Rolling Spot market moving:

  Spread Betting Higher than 6143.5¢, or
  Spread Betting Lower than 6139.5¢

This market is a 'Rolling' market and so there is no closing date for this trade. If you don't close your position and the session ends then your trade will roll over into the next trading day.

Note that if a trade is rolled over then you will either pay or receive a small fee for overnight financing depending upon whether you are betting on the market to go up or down. For more details see Rolling Spread Bets.
Points (Units) Traded:Bets on the Brent Crude market are made in £x per cent.

Where a cent is 1¢ of the energy's price movement.

E.g. if Brent crude changes by 35.0¢ then you would lose or gain 35 times your stake.
Stake Size per Unit:You work out how much you are going to stake per cent, e.g. £3 per cent, £5 per cent, £10 per cent etc.
Quick Staking Example:If, as an example, your stake is £4 per cent and Brent crude moves by 27.0¢, you would win/lose £4 per cent x 27.0¢ = £108.


Worked Trading Example - Going Long of Brent Crude Oil

Spread betting on the commodity price to rise

You Now Work Out Whether to Buy or Sell: Brent Crude to push:

  Spread Betting Higher than 6143.5¢? or
  Spread Betting Lower than 6139.5¢?

You Might Want to Go Long:   Spread Betting Higher than 6143.5¢
You Choose Your Stake, Let's Assume You Choose: £4 per cent
What Next?
  • You make a profit of £4 for every cent Brent crude rises higher than 6143.5¢
  • Your spread bet loses £4 for each cent Brent crude goes below 6143.5¢
When Betting on a Market to Go Up Your P/L = (Final Price - Initial Price) x stake
 
Situation 1
Brent Crude pushes higher and the market is revised and changes to 6183.4¢ - 6187.4¢, i.e.   6183.4   6187.4
Take a Profit? You may opt to let your spread bet run or close it, i.e. close your trade to lock in your profit. In this case you choose to settle your position by selling the market at 6183.4¢.
Your P/L = (Final Price - Initial Price) x stake
(6183.4¢ - 6143.5¢) x £4 per cent
39.9¢ x £4 per cent
Your P/L = £159.60 profit
 
Situation 2
Brent Crude pushes lower and the spread betting market is revised and is set at 6108.2¢ - 6112.2¢, therefore you'd see:   6108.2   6112.2
Limit Your Loss? You may decide to let your trade run or close it, i.e. close your position and limit your losses. In this case you decide to settle your trade and sell at 6108.2¢.
Your P/L = (Final Price - Initial Price) x stake
(6108.2¢ - 6143.5¢) x £4 per cent
-35.3¢ x £4 per cent
Your P/L = -£141.20 loss


Spread Betting Example - Shorting Brent Crude Oil

Spread Betting on the commodity price to fall

You Now Decide to Go Long or Short: Brent Crude to go:

  Spread Betting Higher than 6143.5¢? or
  Spread Betting Lower than 6139.5¢?

You Might Decide to Sell:   Spread Betting Lower than 6139.5¢
You Decide Your Stake, Let's Say You Choose: £3 per cent
Now What Happens?
  • Your spread bet loses £3 for each cent Brent crude goes above 6139.5¢
  • You make a profit of £3 for each cent Brent crude goes lower than 6139.5¢
When Speculating on a Market to Go Down Your P/L = (Initial Price - Final Price) x stake
 
Situation 3
Brent Crude goes lower and the financial spread betting market is adjusted and moved to 6099.6¢ - 6103.6¢, i.e. you'd see:   6099.6   6103.6
Lock in a Profit? At this point, you could opt to leave your spread bet open or close it and take your profit. In this instance you opt to settle your position and buy the market at 6103.6¢.
Your P/L = (Initial Price - Final Price) x stake
(6139.5¢ - 6103.6¢) x £3 per cent
35.9¢ x £3 per cent
Your P/L = £107.70 profit
 
Situation 4
Brent Crude goes higher and the spread trading market is adjusted to 6167.3¢ - 6171.3¢, so you would see:   6167.3   6171.3
Limit the Loss?At this point, you can opt to keep your position open or close it in order to restrict your loss. In this case you choose to close your position by buying at 6171.3¢.
Your P/L = (Initial Price - Final Price) x stake
(6139.5¢ - 6171.3¢) x £3 per cent
-31.8¢ x £3 per cent
Your P/L = -£95.40 loss

Commodities Spread Betting Guides

For further guides to individual metals markets see: For further guides to individual energies markets see:

Summary Commodities Non-Commercial and Open Interest COT Report - 10 Jan 2017


Commodities Net Non-Commercial Commitments (Futures Only) Open
Interest
Change in Open Interest
Long:Short RatioRatio as of 10 Jan 2017 10 Jan 2017 3 Jan 2017 Weekly Change
Gold 2:1 109,482 96,550 12,932 444,001 19,328
Silver 3.7:1 64,601 61,291 3,310 165,040 1,228
Crude Oil (US Light Sweet) 3.5:1 433,562 440,074 -6,512 2,114,656 25,332

For more details about the above report, please see our Commitments of Traders (COT) Guide.

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