top of page
Writer's pictureFahad H

Trading Soft Commodities

Soft commodities embrace sugar, cocoa, espresso, orange juice and cotton.

Sugar

People have been utilizing sugar for over two thousand years, when it was initially reserved for the very wealthy. Today, sugar is likely one of the most closely traded commodities globally.

Sugar commodity contracts expire in March, May, July and October and a one level motion on a commodity CFD contract is price USD5.60. So if a dealer selected to go lengthy on a single sugar contract, and its worth rose by 25 factors, he would make a revenue of USD140 (USD5.60 per level x 25).

Cocoa

Cocoa was found by the natives of Central America over three thousand years in the past, the place it was a luxurious for the wealthy. Today, a lot of the world’s cocoa is grown within the Ivory Coast, Ghana, Indonesia, Brazil, Ecuador and Nigeria. This signifies that when there may be turmoil in these areas, the value of cocoa rises as a result of anticipated disruption of provide.

Cocoa contracts expire in March, May, July, September and December. A one level motion in a commodity CFD contract is price USD5.

Coffee

Coffee was initially found over two thousand years in the past in Ethiopia. From Africa, espresso made its method to the Middle East and into espresso homes, the place it was launched to travellers who unfold its use past the area.

Coffee contracts expire in March, May, July, September and December. Coffee commodity buying and selling contracts are price USD1.88 per single level motion.

Orange Juice

Orange juice is a brand new commodity on the markets – as orange juice was historically consumed as a recent juice, it had a brief shelf-life and was, consequently, vulnerable to cost shocks because of provide disruptions.

Freezing orange juice started within the 1940s after which turned the business normal, the longer shelf-life turning it right into a tradeable instrument.

Cotton

Cotton was found over 5 thousand years in the past and was one among America’s first money crops. Cotton is a really influential commodity because of its wide selection of makes use of and contributes to a big quantity of commodity buying and selling.

Cotton contracts expire in March, May, July, October and December and a one level contract motion is price USD2.50.

How to commerce commodities

Commodity buying and selling is often carried out with futures contracts, that are agreements that the commodity shall be delivered at a sure time sooner or later at an agreed-upon value. The amount, high quality, time and place of supply are all standardised elements of the contract; the one variable is the value.

Unlike buying and selling shares, which might solely be purchased within the hope that the share value will rise and the dealer will make a revenue by promoting the shares at a better value, commodity futures may be quick offered, that means {that a} dealer could make a revenue in a falling market by promoting a futures contract and shopping for it again at a lower cost.

If a dealer selected to go quick on espresso and the value fell by 50 factors, he would make a revenue of USD94 (USD1.88 x 50 factors).

0 views0 comments

Recent Posts

See All

Comments


bottom of page