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There a way to " Position Size " commodities , as....
there is a way to do so with Forex trading, I.e. ( Micro, mini and standard lots )
I am wondering / looking for a way in which, to trade the different commodities ( sugar, coffee, cocoa, oil, gold, wheat, corn, feeder cattle , etc. ) , in the same way that you can do so within Forex trading
I love the Futures market, but the Overnight margins are to much for me to hold my positions overnight ( I don't have an account size , big enough to " safely " hold positions overnight.... I'm at a $4,000 account size right now )
If anyone can share of a way to trade the various commodities markets, in the same way that you can Forex ( micro, mini, standard ), please let me know
Thanks so much - Michael
Can you help answer these questions from other members on NexusFi?
You can trade the e-micros on Futures but beyond that the margin is the margin. If you have a $4,000 account you can only reasonably trade a single ES contract. Some brokers will allow you to leverage more but it's not prudent.
Do what you can to build up your trading capital in the meantime. Best of luck to you.
if you just swing trade consider using CFD. They are OTC instruments(anyway also forex is) but you can reduce your exposure up to 100 times lower the future contract. This will allow to scale in and out more efficently.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
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Many commodities have mini contracts but margin on those are probably still higher than you can handle. If you chart any of these contracts it will appear that the behave differently than the main contracts but they actually behave the same, they just don't trade as often, but the quotes are there. I trade energy, and the popular mini's are
QM - Mini Crude - 500 bbl instead of 1000 bbl
QG - Mini NatGas - 2500 MMBtu instead of 10000 MMbtu
mdsvtr
Trading for Fun
Memphis,TN
He's in the US. (Unregulated) CFD's are not legal here.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,386
Thanks Received: 10,207
Yeah I find it a little wierd that they (US regulators) allow you to trade micro-FX on 50:1 leverage but don't allow CFD's which is basically the same product but with a different underlying than FX.
Sure you hear a lot of horror stories about trading CFDs but you hear just as many horror stories about trading FX through many of the bucket shops.
exactly, well I personally use CFD for seasonal trades that would not be manageable and scalable with futures.
It all depends by the broker you use but however when you stay in position for days or weeks it doesn't matter if you leave to the broker a point or two, but it is much more important that you can scale in and out of your position with the size you want.
I was wondering.... does Interactive Brokers allow CFDs to trader located here in the USA ?
Or is all CFD trading prohibited
And great point on the micros/minis..... I know that there's a mini version of..... Corn, Wheat, Soybeans, Oil, Natural gas and even on Gold and silver
My question with trading these " mini ' versions is.... the volume is definitely a lot less that it is on the underlying,
so would it be wise to trade these mini contracts ( since that all that my account size will currently " safely " allow for ) ?
I have also been considering trading the ETF / stock of the Indexes and commodities ..... such as SPY for the ES, DIA for YM , QQQ for NQ, GDX for gold, SLV for silver, USO for oil
I just need to find the ETFs and stocks for the other commodities ..... wheat, coffee, corn, feeder cattle, orange juice, lumber, sugar, etc. Any ideas and or recommendations ?
1) Why would you want to trade a CFD when you could trade futures? Assuming a 10 cent spread versus 1 cent on crude, it seems like you're worse off trading the CFD.
2) At a $4,000 account, you are really not in a position to be holding positions overnight, since a unexpected move in say copper or NG could easy get you margin called. If you are dead set on holding positions for a longer run, why not look into an option strategy?
But to answer your most basic question, no, there is really no good way to go diving up 1 contract of crude to a single gallon the same way FX can go all the way down to a single dollar. Even something like the Crude Mini Contract is a poor choice because it is so illiquid.
