Commodities - Market Information

find out more on

Tomorrow-Next (Tom-Next) Rates

The Tom-Next rate for a given market is the rate you must pay to roll a position (i.e. stop your position being closed tomorrow and keep it open until the next day). We utilise it in some of our funding charge formulas. The rate itself is determined by banks and the market.

For example, if you buy Spot Gold in the official markets (rather than just placing a bet on its price like you do with us), then this trade will usually settle T+2, meaning that (loosely speaking) two working days after the trade date, you will be locked into having gold delivered.

Suppose you bought Spot Gold on Monday, and it’s now Tuesday. As it stands, you have gold being delivered tomorrow (Wednesday), but if you don’t want to take this delivery tomorrow and would rather keep the position open, then you can roll it at whatever the prevailing Tom-Next rate is. From the perspective that it is now Tuesday, rolling the position once via Tom-Next rates extends the settlement date by one day to Thursday.

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. You can specify whether you would like to roll any commodity ‘futures’ or ‘daily futures’ trades to roll into the next contract by visiting the ‘Rolling Trades’ page within ‘My Account’ once you have logged in.

When you first open the account, as a default setting, all preferences are set for trades not to roll. If you wish for your trades to roll past their respective expiry dates it is essential that you have updated these preferences.

If you would like to roll all Commodities trades, please ensure that the ‘Commodities’ box is ticked, as shown in the above example.

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.

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 Silver trade equates to in the futures market?

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

find out more on

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.

find out more on

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).

Find out more on

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.

Find out more on

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.

find ouT more on

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.

When spread betting on corn you trade per cent movement. Price movements can sometimes be volatile with up to 100 point movements per day occurring with regularity.

When spread betting 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.

find out more on

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 spread betting 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.