Questions on Commodities Trading

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.

As far as I understand, actual futures contracts are exchange traded, but most brokers offer CFDs of those futures.
CFDs are not exchange traded except for a small amount in Australia, I believe.
With CFDs, as there is no exchange, your broker is the market maker and sets the price.
Obviously, the market maker (MM) should try to keep it's books balanced. Ie, Have clients' open long positions equal to short positions. If they are not balanced, then because the MM is taking the other side of your trade it is exposing itself to risk.
I know that some MMs will hedge their risk by investing in the underlying market or some other derivative.
In theory, the MM can set any price it likes for a CFD, but in practice, it stays pretty close to the underlying instrument. If CFD prices varied too much between different MMs, it would be open season for the arbitrage traders.

Thank you very much Gumrai. It is a lot more clearer now.

So volumes in this regards would mean the broker's volumes because the CFD's are traded OTC.

One nagging question though.

Why do some brokers offer CFD's with contract expiry while some just list the instrument?

Ex: What's the difference between broker A, offering CORN July Expiry; CORN September Expiry while broker B just lists Corn?
I noticed that in this case broker A charges rollover swaps but broker B doesn't.

What is broker B referring to here?

I don't know for sure, but I would think that if they just list it as corn, that it would be the current price of corn and not from the futures market.

Of what I could gather about CFD after talking to my trading buddies and browsing on Investopedia is that when you deal with a broker who offers CFD, you are essentially enrolled into a contract wherein the differences in settlement are made through cash payments, rather than the delivery of physical goods.

hi, i would like to view some charts for crude oil and corn , can i know which broker provides these feeds on mt4 platform?

and is there any trading simulator we can apply to mt4 for trading these?

Markets.com, HotForex offer the above on MT4. Markets is a bit better because their commodity CFD's are shown along with expiry periods, CornZ and so on, whereas hotforex only displays, Corn, Wheat, Sugar, etc.

Thank for the reply. I just googled and found Alpari UK is using Mt4 for trading commodities. Is anyone using Alpari to trade commodities, any reviews?

If the expiry month is not listed, then it is the front month (ie the most active).

Hello everyone!
i would like to get to know whether there is a broker (if possible not asian) that offers instruments based on (Crude) Palm Oil prices or just (Crude) Palm Oil futures. Another question is, do you happen to know what is the most correlated instrument with (Crude) Palm Oil except for Soybean Oil? If none of brokers does not offer this type of insrument i would like to know at least which instrument replicates (Crude) Palm Oil prices the most.
Thank you in advance.
Greetings
Kariszef

Ah noone answered. So maybe do you know some brokers that enable trading on Diamonds? Some CFD on diamonds futures (if exist), indexes etc?
Thank you in advance.
Greetings
Kariszef

Hi!
Why do you have so exotic requests about instruments? Try to trade with more popular ones as they have more liquidity.

I think its important to note that CFD's are not available in the US so if you use a US broker and you trade futures, everything will have to go through the exchange by law

sorry, I clicked post too early. I mean, I found a broker describing rollover dates as below. It's quite confusing. Should I just check SME websites to see the last trading date for the contract period and the day before the last trading date is the rollover time.

THe brokers website has below:
Accounts will be cash adjusted on positions held at the following times:

1. HSI Future – Close of business on the day 3rd to last business day of the contract month.
2. CAC40 Future – Close of business on the day before the 3rd Friday of expiry month.
3. DAX30 Future – Close of business on the day before the 3rd Friday of expiry month.
4. S&P Future – Close of business on the Wednesday the week before the 3rd Friday of expiry month.
5. FT100 Future – Close of business on the day before the 3rd Friday of expiry month.
6. DJ30 Future – Close of business on the Wednesday the week before the 3rd Friday of expiry month.
7. SPI200 Future – Close of business one day before the 3rd Thursday of expiry month.

Thanks in advance

I was searing information for futures CFD rollovers. There are only brokers briefly talking about their rollover charges but it seems not very clear to me. Above is the only thread I found which talks about futures CFD rollovers in the forum. I have below questions, if anyone can assist, it would be much appreicated.
1) cash adjustment is applied when there's a rollover. What's included in this cash adjustment?
one of the brokers provided a calculation formula as below. However, another broker seems doesn't charge spread costs and overnight premium costs. I'm confused what should be included in the rollover charges now.

(Amount x (New Contract Price – Old Contract Price)) + (Spread Costs*) + (Overnight Premium Costs)
*Spread Costs are calculated based on Market Spreads at the time of the Rollover Calculation.

2)I found this example on a broker's website. I dont understand why there's a zero financial effect.
Example 1:
Long position of 1000 barrels:
September Contract closes @ $110.00
October Contract opens @ $111.38
Cash adjustment of – $1,380 is made on account
Profit of $1,380 is made on open position
Net financial effect is zero.

Thanks for your help in advance.