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

Energy Commodities traded with Easy-Forex ® include, WTI Crude Oil, Brent Crude, Gas Oil and Heating Oil. These commodities are traded by investors for a number of reasons, including hedging, investing and speculating. On a large scale, energy commodities are traded by energy companies and consumers to hedge themselves against rising or falling prices.

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 United States dollar only. You do not buy and sell the physical thing. Think of the gold and silver as another form of e-currency. The sign for e-gold is XAU; the sign for e-silver is XAG.

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

What is 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.

Managed floating exchange rates

Governments normally engage in managed floating if not part of a fixed exchange rate system. Fixed rates provide greater certainty for exporters and importers and, under normal circumstances, there is less speculative activity - although this depends on whether the dealers in the foreign exchange markets regard a given fixed exchange rate as appropriate and credible.

Advantages of floating exchange rates

Fluctuations in the exchange rate can provide an automatic adjustment for countries with a large balance of payments deficit. A second key advantage of floating exchange rates is that it gives the government / monetary authorities flexibility in determining interest rates.

Fully fixed exchange rates

In a fixed exchange rate system, the government (or the central bank acting on its behalf) intervenes in the currency market in order to keep the exchange rate close to a fixed target. It is committed to a single fixed exchange rate and does not allow major fluctuations from this central rate.

Semi-fixed exchange rates

Currency can move inside permitted ranges of fluctuation. The exchange rate is the dominant target of economic policy-making, interest rates are set to meet the target and the exchange rate is given a specific target.

Free floating

The value of the currency is determined solely by market supply and demand forces in the foreign exchange market. Trade flows and capital flows are the main factors affecting the exchange rate. A floating exchange rate system: Monetary system in which exchange rates are allowed to move due to market forces without intervention by national governments. For example, the Bank of England does not actively intervene in the currency markets to achieve a desired exchange rate level. With floating exchange rates, changes in market demand and supply cause a currency to change in value. Pure free floating exchange rates are rare - most governments at one time or another seek to "manage" the value of their currency through changes in interest rates and other controls.

Stock market: The major stock indices also have a correlation with the currency rates

Political factors: All exchange rates are susceptible to political instability and anticipations about the new government. For example, political or financial instability in Russia is also a flag for the euro to US dollar exchange because of the substantial amount of German investments directed to Russia.

Economic data: Economic data or indices such as labor reports (payrolls, unemployment rate and average hourly earnings), consumer price indices (CPI), producer price indices (PPI), gross domestic product (GDP), international trade, productivity, industrial production , consumer confidence etc, also affect fluctuations in currency exchange rates.

Confidence in a currency is the greatest determinant of the real euro-dollar exchange rate. Decisions are made based on expected future developments that may affect the currency. A EUR / USD exchange can operate under one of four main types of exchange rate systems: