Commodities Trading
Commodities Trading with Tight, Fixed Spreads
Commodities are simply goods which are bought and sold at a market price on the basis that quality of the goods is the same irrespective of the origin and supplier.
For example, crude oil from the UK should be the same as crude oil sold in any other location, and the standard unit of measurement is the barrel.
Most commodities will have some standards related to their quality etc which is understood by everyone who trades them.
- Precious Metals – such as Gold and Silver
- Energy – Crude Oil
Trading on commodities
Trading on commodities is a good way to diversify your portfolio as commodity prices are generally less influenced by changes in stock markets.
Spread betting and CFDs let you speculate on commodities and benefit from their rising or falling prices.
For example, the FTSE 100 comprises the top 100 UK companies measured by market capitalisation (the price of their shares multiplied by the number of shares in circulation).
The relative market capitalisation of a company determines their weighting within the UK100. For example, 1% change in the price of Royal Dutch Shell will impact the UK100 more than a 1% change in Tullow Oil as Shell has a larger market capitalisation.
Why choose Spread Co for commodities trading?
We offer tight spreads on:
- Spot Gold – 4 points
- US Crude Oil Future – 4 points
- Spot Silver – 2.5 points
We also offer competitive margins when spread betting, as low as 5% on Spot Gold, 10% on Silver and 10% on US Crude Oil Futures.
View our market information for further details on our spreads and margin requirements. Take a look at a spread betting or CFD example
Advantages over share dealing
Trading this way has two key advantages over traditional share dealing:
- Profit when prices rise or fall – when you buy shares in a company, you’ll only profit when the share price rises. With spread betting and CFDs you can speculate that a company’s share price may fall as well as rise.
- Lower capital investment – spread betting and CFD margins are typically 5%, so you can leverage your capital up to 20 times. This means you only have to tie up a fraction of what you normally have to when you buy shares.
View our market information for further details on our spreads and margin requirements. Take a look at a spread betting or CFD example.