Hi Guys, i've been reading quite a bit on commodities futures markets and just started demo trading some grains and couple of other soft commodities. I have some questions and couldn't the answers, hoping some experienced members will answer them here.
1) Is there any difference between commodities CFD's and commodities futures?
Ex: Some brokers I see have Corn futures with july expiry. Ok, it makes sense, but some brokers just list the instrument as corn (their website says its commodities cfd's). Is there any difference?
Is comm. CFD's similar to how spot forex market works? i.e: We only speculate but aren't involved in actual delivery? Also how is the counterparty for comm. cfd's? Is it the broker that we trade with?
I read that the futures expiry prices actually move differently. Ex: July expiry corns prices might move differently to September expiry and so on.
2) Volumes
I'm using MT4. And in forex the common problem when using volumes is that because forex is OTC, there is no single order book to get the actual volumes.
For commodities, I understand that there is CBOT, Kansas city board etc, etc. However, my question is more to do with the 'Volume' indicator. How does it work in this case? Is it again restricted to the broker's volume only?
3) Some brokers charge spreads
Am I right in assuming that brokers who charge spreads operate the same way as a fixed spread/market maker? Is there any broker that charges only commission? Also which in your view is better when it comes to commodities trading?
Thanks in advance for your time explaining the above.
1) Is there any difference between commodities CFD's and commodities futures?
Ex: Some brokers I see have Corn futures with july expiry. Ok, it makes sense, but some brokers just list the instrument as corn (their website says its commodities cfd's). Is there any difference?
Is comm. CFD's similar to how spot forex market works? i.e: We only speculate but aren't involved in actual delivery? Also how is the counterparty for comm. cfd's? Is it the broker that we trade with?
I read that the futures expiry prices actually move differently. Ex: July expiry corns prices might move differently to September expiry and so on.
2) Volumes
I'm using MT4. And in forex the common problem when using volumes is that because forex is OTC, there is no single order book to get the actual volumes.
For commodities, I understand that there is CBOT, Kansas city board etc, etc. However, my question is more to do with the 'Volume' indicator. How does it work in this case? Is it again restricted to the broker's volume only?
3) Some brokers charge spreads
Am I right in assuming that brokers who charge spreads operate the same way as a fixed spread/market maker? Is there any broker that charges only commission? Also which in your view is better when it comes to commodities trading?
Thanks in advance for your time explaining the above.