Energy contracts and Soft Commodities
Energy contracts, like Oil and Natural Gas are very liquid contracts and that is why they are very popular among professional traders around the world. iPrime provides you an access to both UK-based Brent Crude Oil (#BRENT) and US-based Light Crude Oil (#WTI) contracts. Although these contracts show strong correlation, sometimes professional traders can find inefficiency in the prices which allows them to build pair-trading strategies, taking one contract long and another short, earning profits within the spread.
Another popular energy contract is Natural Gas that is traded in US. The Natural Gas contract can be very volatile and our advice to clients is to strictly control their trading risks and always have enough available margin.
To diversify the portfolio, iPrime offers a wide list of other commodities, including Coffee, Cocoa, Wheat, Corn, Sugar etc. All these instruments are provided as Contracts For Difference (CFD) contracts. CFDs Profit & Loss (P/L) calculations are based on the difference in opening and closing price of your position. CFDs are also leveraged contracts so you can increase the trading size based on your appetite for risk.
Another benefit of trading CFDs is that these contracts are based on rolling spot prices and do not expire. Please study the historical data to identify long-term cycles and correlations between different commodity symbols. Technical analysis tools like Channel Breakout are often more reliable with spot commodities.