Commodities

With FOREX.com, you can trade crude oil, natural gas, corn and more as CFDs. Click here to view our range of markets.

A CFD, or contract for difference, is an agreement to exchange the difference between the opening and closing price of the position under contract, rather than buying and selling the underlying security outright.

FOREX.com is compensated by the spread, which is the difference between the bid and ask prices. View our live spreads.

In addition, you may be charged a nightly finance charge if you hold a position overnight, after 5pm ET.

With most CFDs, financing is debited for long positions or credited for short positions daily if you are in a position at 5pm ET.

These charges are typically calculated as follows:

F=(S x P x R)/D

F - Daily Financing Charge
S - Number of CFDs (2500)
P - Closing Price
R - Relevant overnight LIBOR rate, +250 basis points for long positions or -250 basis points for short positions, e.g. (4.50% + 2.50%) = 7.00%
D - Number of days, i.e. 365 for UK equities and 360 for all others

All of our commodity CFD markets, including markets on MetaTrader, expire. The iBox on the trading platform displays the date and time of the next upcoming expiry for a CFD market, and the Market Information Sheets in the trading platform have more details.

When a CFD market expires, we close all open positions based on our most recent prices and all open orders are cancelled. To retain your open positions in a market, you must manually open a new position in the next contract month.

To price these non-expiring markets, we use two sufficiently liquid futures contracts on the underlying commodity. This is usually the two with the nearest expiry date.

The contract with the closest expiry date is called the Front month contract and the second-nearest expiry date is called the Far month contract.

Throughout the duration of the Front month contract, the price of the NEC will gradually move from the price of the front month to the price of the far month.

As there will be an adjustment to the NEC Market price every day, your account will be subject to an adjustment in the form of a Credit/Debit to offset this price adjustment. For example, if the NEC contract is adjusted by +2 points, clients with long positions will be debited 2 x stake and clients with short positions will be credited 2 x stake. See further explanation and video below.

In our video, the front month is labelled ‘A’ and the far month ‘B’.

NEC contract market prices move from the price of market ‘A’ towards the price of market ‘B’ as the expiry date of ‘A’ becomes closer. The price of market ‘B’ may be higher or lower, depending on the commodity, than that of market ‘A’.

Daily adjustments for NEC contract markets reflect a day’s movement from ‘A’ towards ‘B’.