The markets continue to feel the squeeze from
The EUR / USD was trading higher following the closing of the New York trading session when the currency pair rallied to a high of 1.3414 after opening the day at 1.3369. The GBP / USD was unchanged at 1.5469, as was the USD / CHF at 1.0730.
Today's trading should be influenced by economic releases and speeches. The key data releases for the day will be British CBI Realized Sales at 10:00 GMT and US CB Consumer Confidence at 14:00 GMT. Both Fed Chairman Ben Bernanke and ECB President Trichet are due to speak at separate events close to 14:00. The EUR / USD could fall further as market sentiment is clearly against the EUR. The next major support level for the pair rests at 1.3180.
Monday, May 3, 2010
Dollar Fails to Find Direction in Forex Trading
Dollar Fails to Find Direction in Forex Trading
The EUR / USD was trading higher following the closing of the New York trading session when the currency pair rallied to a high of 1.3414 after opening the day at 1.3369. The GBP / USD was unchanged at 1.5469, as was the USD / CHF at 1.0730.
Today's trading should be influenced by economic releases and speeches. The key data releases for the day will be British CBI Realized Sales at 10:00 GMT and US CB Consumer Confidence at 14:00 GMT. Both Fed Chairman Ben Bernanke and ECB President Trichet are due to speak at separate events close to 14:00. The EUR / USD could fall further as market sentiment is clearly against the EUR. The next major support level for the pair rests at 1.3180.
East Sour Crude Futures: Contract Specification
The specifications for East sour crude futures are:
Trading Hours: Trading opens at 23:00 Sunday night
Units of Trading: Traded in lots of 1,000 barrels.
Minimum Price Fluctuation: The minimum fluctuation is one cent per barrel, or a tick value of $ 10.
Maximum Price Fluctuation: No limit to maximum fluctuation.
Contract Listings: 37 successive months are listed by the exchange. Contracts for the calendar year and quarter are also listed.
Last Trading Day: Trading ceases at 16:30 local
Clearing: The Clearing House guarantees the financial performance of all ICE Futures contracts registered with it by its clearing members. All ICE Futures Member companies are either members of the Clearing House or have a clearing agreement with a member who is a member of the Clearing House.
Settlement: Mid East sour crude futures is settled with cash against the mid-point of the bid / offer prices for the relevant contact month in
Mid East Sour Crude Futures
East sour crude is the type of oil that is extracted from the Middle East countries, such as
East Sour Crude Futures: Basics
East sour crude futures are standardized contracts in which a buyer agrees to take delivery of a specific quantity of sour crude oil at a predetermined price and date from the seller. The East sour crude futures market enables traders to:
• hedge against adverse movements in oil prices. Companies and even individuals can benefit from hedging
• speculate on the movement of East sour crude oil prices. Crude oil futures are extremely popular among big financial institutions and retail traders alike.
East Sour Crude Futures: Trading
Trading of the
• Low liquidity
• Contracts with high spreads
• High risk
The ICE Middle East sour crude futures contract is an electronically traded product. The underlying asset of this futures contract is the crude oil sourced from
Upper Zakum (originating in
The ICE Middle East sour crude futures contract is cash-settled against the Platts Dubai physical cash price assessment. Platts Dubai is the leading benchmark for sour crude oil in the over-the-counter (OTC) markets.
With the start in trading in the ICE Middle East sour crude contract, the existing benchmark for the sour grade of crude and that for Brent and WTI traded together on the ICE's electronic trading platform. As a result, traders and speculators can trade spreads between the futures contracts for Brent, WTI and East sour crude and benefit from cross margins.
Trading unit:
Futures: Trading takes place in lots of 5,000 troy ounces.
Options: Trading takes place in lots of COMEX Division silver futures contract.
Trading hours: The open outcry session starts at 8:25 and closes at 13:25
Price Quotation: The contract price is quoted in dollars and cents per troy ounce.
Maximum Price Fluctuation: Maximum price fluctuation is in multiples of one-half cent ($ 0.005) per troy ounce (equivalent to $ 25 per contract). For straddle or spread transactions, as well as the determination of settlement prices, the price changes are registered in multiples of one-tenth of a cent ($ 0.001) per troy ounce equivalent to $ 5 per contract. A fluctuation of one cent ($ 0.01) is equivalent to $ 50 per contract.
Maximum Daily Price Fluctuation:
Futures: Initial price limit of $ 1.50 above or below the preceding day's settlement price.
Options: There is no limit to price fluctuations in options.
Trading Futures on the Silver Exchange
Investment has been a core element of the silver market due to its appeal in the form of jewelry and ornaments. However, due to the small market size and speculative appeal, price volatility is the highest for silver among the major commodities. Thus, prices in the silver exchange fluctuate even with a little influx of capital. Speculators are attracted to this volatility, adding to the gyrations.
Trading in this precious metal is conducted at the two popular silver exchanges, the eCBOT (Chicago Board of Trade) and the COMEX (division of the New York Mercantile Exchange - NYMEX).
Silver Exchange: Factors Influencing Demand
Trading in the silver exchange depends entirely on demand for the previous metal. Silver prices are dependent on the demand from the following sources:
• Government reserves. The
• Industrial demand. Industries account for about 40% of the demand for silver. This metal is used in mirrors, electronics, batteries and photographic equipment, among other products.
• Demand from the ornament and silverware market.
• Demand from investors and speculators: This group accounts for 5% of the demand for silver. For example, purchases made by large investors can have an immediate impact on the demand and price of silver.
Silver Exchange: Trading Futures Contracts
A futures contract is a legal agreement standardized by a silver exchange. In the silver futures contract, a buyer agrees to receive the delivery of the metal on a future date at a predetermined price.
The features of silver trading in exchanges are:
• Silver is traded in mini and normal contracts. While the mini contract allows trading in 1,000 ounces, the normal contract involve trading in 5,000 ounces of silver. While the mini contract can be traded only in eCBOT, a normal contract is available at both the silver exchanges.
• The most active months for delivery in terms of volume and open interests are March, May, July, September and December.
• Exchanges have set position limits for silver trading.
Only about 1% of silver futures contracts traded every year result in delivery. Traders generally close their futures positions before the maturity date of their contracts.
Silver Exchange: Contract Specifications
The contract specifications for futures and options trading on the COMEX silver exchange are:
The advantages of online trading in gold
Gold trading prices
Generally, as the price of gold increases, the price of the US dollar falls. This is why investors use gold trading as a way of balancing their profit and loss against the US dollar. Also, as gold tends to keep its purchasing power over time, investors may buy gold to balance the effects of inflation and currency value changes.
Gold and Silver
Online trading in gold is straight forward with Easy-Forex ®. In the Forex market, gold is considered a form of currency, and so is silver. Online trading in gold is electronic, the same as other currencies and oil. Gold is traded in a similar way to other currency pairs.
However there is a difference: gold, silver and other commodities can only be traded against
Trading with gold rates
Like foreign currency rates, online trading with gold rates does not require the "physical" purchase or sale of the real material. You do not purchase gold that you can hold.
The trading method for gold is called 'over the counter' or OTC. OTC deals are not part of the Stock Exchange of any country and so the deals are not controlled by the same methods as the Stock Exchange. OTC trading is performed directly between the seller and the buyer. No other people or organisations are involved.
OTC trading is the common form of trading in the Forex market.
Day-trading in gold
Traders can perform day-trading in gold. Day-trading means deals are usually completed before the close of trading that day. Gold traders usually hold their position for a short time only, but it is not necessary to complete the deal within a day. The deal can be extended for two or three days, depending on how the trader decides to make the deal.
Once a gold day-trading deal is opened, it can only close in one of three ways:
• The trader ends the deal
• The deal reaches its stop / loss limit
• The date decided for ending is reached
Until one of these three things happens, the deal continues. When your day-trading gold deal is open, it is renewed automatically every night at 22:00 GMT, and each time it is renewed, a small charge is made from your trading account.
Fundamentals of Heating Oil Futures (HEO)
Heating oil is produced from the refining of crude oil. The refining of crude yields 50% gasoline and 25% heating oil. This product of crude oil is also called distillate or Number 2 oil. In
Heating oil is used primarily to heat homes in
Heating Oil Futures: How Weather Impacts Price
Traders dealing in heating oil futures should consider checking weather reports regularly. The importance of weather reports increases substantially during the winter months (from December to February). The focus should be on Northeast USA, as this region accounts for 80% of
Trading Heating Oil Futures: Tips
Here are some tips when trading heating oil futures:
• Heating oil prices typically move in sync with that of crude oil
• Most profit-making opportunities arise during the winter months. Prolonged periods of extreme cold or an unanticipated cold wave in
• Buying heating oil futures in winter does not assure success in futures trade. Profit-making opportunities arise only when the weather is colder than anticipated. This results in the higher-than-expected consumption of heating oil during the season, boosting demand.
Specifications for trading Heating Oil with Easy-Forex ®
Easy-Forex ® Symbol for Heating Oil: HEO
Quote convention: USD per metric ton,. HEO / USD = 1.7200 USD per metric ton.
Expiration date: All HEO deals will expire at 12:00 GMT one business day before the last business day of the month preceding the delivery month. Click here to find out more about Rollover of HEO deals to new contracts.
Trading hours: Trading is conducted 01:30
Easy-Forex Symbol for Gas Oil: GAS
Quote convention: USD per metric ton, e.g. GAS / USD = 540.00 USD per metric ton.
Expiration date: All GAS deals will expire at 10:00 GMT two business days prior to the 14th calendar day of the relevant futures delivery month. Click here to find out more about Rollover of GAS deals to new contracts.
Trading hours: Trading is conducted 01:30
Gas Oil Trading (GAS)
Gas oil is a product of crude oil and is used for heating purposes and for generating power. Therefore, it is also called heating oil in the
Gas Oil Trade
Gas oil is traded widely in
Gas oil options and futures are used by:
• companies to hedge against diesel and jet fuel costs. Both diesel and jet fuels trade in the cash market at a premium to
• traders to capture profit-making opportunities.
The underlying physical asset for gas oil futures contracts, as offered on the ICE exchange, is gas oil barges delivered in ARA (
Trading in Brent Oil
Specifications for trading Brent Oil with Easy-Forex ®
Easy-Forex ® Symbol for Brent Oil: BRT
Quote convention: USD per barrel, e.g. BRT / USD = 80.00 USD per barrel.
Expiration date: All BRT deals will expire at 12:00 GMT on the 15th day before the first day of the contract month. If the 15th day is a non-business day, deals will expire on the business day preceding the 15th calendar day. Click here to find out more about Rollover of BRT deals to new contracts.
Trading hours: Trading is conducted 01:30
The Basics of Brent Oil Trading (BRT)
Brent oil is the light, sweet crude sourced from the
Characteristics of Brent Oil
The following are the characteristics of Brent oil:
• It is of a high-quality grade
• Brent is light crude oil. However, its viscosity is higher than that of WTI crude
• It contains roughly 0.37% of sulfur. As a result, it is classified as sweet crude
• It is best for the production of middle distillates and gasoline
• Brent is typically refined in
Easy-Forex ® Symbol for WTI Oil: OIL
Quote convention: USD per barrel, e.g. OIL / USD = 75.00 USD per barrel.
Expiration date: All OIL deals will expire at 12:00 GMT on the fourth
Trading hours: Trading is conducted 01:30
Trading in WTI Crude Oil (OIL)
West Texas Intermediate (WTI) crude oil is a light, sweet crude oil produced in
Characteristics of WTI Crude Oil
WTI crude oil has:
• High quality grade
• Less than 5% sulfur content
• Faint sweet taste (which is why it's often called 'light sweet crude').
WTI crude oil also has a lower level of other impurities, as a result of which it is easier to refine. Moreover, it is easier to transport than heavy sour oil, which has a high wax content, high density and high viscosity. Due to its scarce availability, the demand for WTI crude oil is always likely to remain high. All these factors make WTI crude oil the world's most liquid oil commodity in an electronic marketplace.
Specifications for trading WTI Oil with Easy-Forex ®
Trading energy commodities with Easy-Forex
Easy-Forex ® offers Day Trading in energy commodities as it also does with Gold and Silver Trading. However, unlike these commodities, energy commodities have some peculiarities as they trade predominantly over the exchanges and there is not a liquid continuous spot market.
Trading energy commodities
Online commodities trading at Easy-Forex ® is performed as OTC (Over the Counter) trading which means that the transaction is performed directly between the two parties involved - the buyer and the seller. There is no third party involved like in an exchange market and it is cash settled; (non-delivery trading) the physical purchase or sale of the commodity is not actually performed.
Expiration of Oil Positions / Online Oil Trading Deals
Unlike Day Trading deals in forex currency trading, all open energy commodity day trades expire on a specific date each month regardless of the opening time and date of the deal. To see the expiration of each commodity offered by Easy-Forex ® go to each product's specific page found in the commodities articles section in the Learn centre of the site. Click here to view trading hours.
Rollover of Commodity deals to the new contract
Easy-Forex ® does not rollover expiring deals to the new contract, unless notified beforehand. The client should directly contact his dealer or ASM one working day before expiry of deal for renewal. Client should note that in the case of renewals, Easy-Forex ®
will not carry the profit or loss to the new deal.
If instructed to, as soon as the old deal is automatically closed, a dealer will open a new deal expiring in the new month that follows the expired deal with the same amount and type of the closed deal. The remaining margin on the expired deal will be placed on the new one, unless the client instructs the dealer otherwise. The opening rate of the new deal will be done at the new month's rate.
Using an OIL / USD deal as an example: at expiry time 12:00 GMT the old contract closing price was at USD35.50 per barrel and the new contract price is trading at $ 40.50. At expiry, the old deal will be closed automatically at $ 35.50. Any profit or loss will be reflected in the margin and thus in the free balance. If instructed, the dealer will open a new deal at a price of $ 40.50 (the price of the new contract at 12:00 GMT), and place an amount equal to the remaining margin on the old deal, unless instructed otherwise.
Energy Commodities
Commodities are usually traded using futures contracts. A futures contract is a contractual agreement, generally made on the trading floor of a futures exchange, to buy or sell a particular commodity or financial instrument at a pre-determined price in the future. At Easy-Forex ® you can trade commodities using our Day Trading product, keep in mind that the deals are cash settled (you don't take delivery of the actual goods) and that they must expire on a set day in the future. The pricing of all commodities day trading deals is based on the next futures delivery month.
How to open a Day Trade with the commodities with Easy-Forex ®
1. First, log into your account in the Trade Zone
2. Select the Commodities tab in the central trading ticket
3. You will notice that the Rates Table on the left has changed from currencies to commodities. You can customize your commodities table in the same way you can your currency rates table
4. Select which commodity you want to buy or to sell
5. Select the amount to trade
6. Select your margin to risk
7. Your Stop Loss is set automatically, you can change this after you've opened your deal by clicking 'modify' in the My Position area
8. Choose to click 'Freeze Now' to lock in a rate for a few seconds or go directly to Trade Now to open the deal
9. Note that there is no Renewal Date for commodities as they are Futures Contracts - the expiry date of this contract is shown in the trading ticket
10. You can choose to close this deal before the expiry date - your investment (amount to trade) will be returned to the free balance in your account.
Benefits of e-currency
With e-currency, banks now offer services where customers can send money from one place to another without using cash. Using e-currency, customers can pay bills, change money from one account to another, and pay for things they want to buy such as food, a car, a television or a service such as Forex Trading.
It is now quite easy to exchange money all over the world using e-currency. Modern technology makes money exchange fast and secure.
How is e-currency used in the Forex market?
In the online Forex market, e-currency is the main form of money used. All trading is done on computers using the Internet. Forex traders can still deposit money into their account at the market maker in the old fashioned way (eg - via bank wire, or by sending checks by mail). Once such deposit is accepted - they can trade Forex online. Most traders, however, use their credit card or other form of e-currency to deposit funds to their Forex account. Once a trader wishes to withdraw funds, they are wired directly to the trader's bank account.
If you want to start trading, open an Easy-Forex ® account. Your account contains your e-currency, which is your Internet money. This is what you use for trading. Easy-Forex ® accepts payment with major credit cards, PayPal or Bank Transfer.
E-gold and e-silver
E-Gold and E-Silver refer to Forex trading of Gold (XAU) and Silver (XAG). Since this is "Forex trading" or "OTC" (meaning "over the counter" and not via an exchange or a stock market), no actual metals (such as real gold or real silver) are traded. What is traded is a contract of their price. The unit for such XAU or XAG is one ounce (about 30 grams). Units of XAU and XAG are quoted and traded in USD.
Trading in gold and silver is electronic, the same as other currencies. Gold and silver are traded against the
Trading commodities on the Visual Trading ™ platform is as simple and straight forward as it is to trade currencies. Easy-Forex ® offers a number of commodities which are traded differently to currencies.
E-currency
E-currency is money that is exchanged on computers. 'E' is the first letter of the word 'electronic' and 'currency' is a money system. You can think of e-currency as Internet money.
Buying and selling products and services on the Internet is possible because of e-currency. In the present time, more security on the Internet means more people are now buying and selling online. Modern security means it is now safer to deal on the Internet, but there are still some risks involved.
Credit cards are a popular example of e-currency. E-wallets (online money vendors) is another.