Commodities trading has literally been around for thousands of years. They are the backbone of the global economy, and the rise and fall of them can be used to check the health of the business cycle and inflationary pressures.
At ThreeMarkets we offer our clients access to the most popular precious metals and energy markets.
Gold has traditionally been as a store of value, protection against inflation and widely used in jewellery. Yet it also loved by day traders at it quickly reacts to market sentiment for the day. Silver is a more volatile version of gold (and has always been more affordable) whilst Palladium demand continues to rise, making it popular with trend traders.
And by offering Brent and WTI crude oil to our clients, they can trade reactions to economic news, geopolitical headlines, seasonal trends.
ThreeMarkets provide traders with access to commodity markets via CFDs (Contracts for Difference) which are a form of derivate. The advantage of trading CFDs means the trader can speculate both long and short without owning the underlying commodity. Margin requirements are also low, which makes it more affordable to enter a trade.
Our commodity markets are available nearly 24-hours a day, 5 days per week, making them an ideal instrument to trade regardless of which time zone one lives.
The exchange rate between gold and the US dollar is USD $1850. A trader expects gold to rise in value, so they enter long (buy) 0.1 contracts of gold, which is equivalent to 10 ounces of gold (as one full contract is worth 100 ounces of gold).
The trader also places a protective stop loss at $1799 and a take profit at $1965.
Over the next two weeks, the gold price rises to 1965 and automatically triggers the take profit order.
The take profit order books the trader a profit of USD $1,150.
10 ounces x (1965 – 1850) = $1,150
Instead of rising as the trader had hoped, gold depreciates in value against the US dollar and triggers the protective stop loss order.
The stop loss automatically closes the trade for a loss of -$510.
10 ounces x (1799 – 1850) = -$510
