Trading Commodities Via CFDs And Futures

CFDs: divisible, open-ended, and rented by the night

A CFD has no expiry in most cases and no fixed contract size, so you can hold 7 barrels if that is what your risk budget allows. That flexibility is the reason most retail commodity exposure is taken this way. The cost of it is that your counterparty is the broker, the quote is the broker's quote, and you pay for the position every night it stays open.

• Overnight financing is charged on the full notional, not on your margin. A 20,000 USD notional gold position at a 6% annual financing rate costs roughly 3.30 USD a night, which is 100 USD a month against a position you may have funded with 400 USD.
• The spread is the broker's, and it widens outside the underlying market's core hours and around scheduled data.
• Some CFDs are dated anyway. Brokers commonly offer both a rolling cash CFD and an expiring one that tracks a specific futures month. Check which you have opened.

The rollover adjustment that looks like a gap

When a rolling commodity CFD moves from one underlying futures month to the next, the two months are not at the same price. If the expiring month is at 78.00 and the next is at 78.60, the chart would jump 60 cents overnight for no market reason at all. Brokers handle this with a cash adjustment: they shift the price and credit or debit your account the difference, so your net position value is unchanged.

The point that catches people is what happens to your orders. The adjustment moves the price but does not always move your stop and target, so a stop that sat 40 cents away can end up 100 cents away, or on the wrong side of price entirely. If you hold commodity CFDs through a rollover date, read your broker's rollover notice and reset your levels the next morning.

Costs on a two-week WTI position, side by side

Take 100 barrels held for ten trading days. On micro futures that is one contract: commission of roughly 1.50 USD per side, so about 3 USD round trip, plus exchange fees, and no financing charge because futures pricing already contains the cost of carry in the curve. On a CFD it is 0.10 lots: no commission at most brokers, a 3 cent spread crossed once over the round trip, so about 3 USD, plus ten nights of financing on 7,800 USD of notional, which at 6% is roughly 13 USD. Total around 16 USD against around 4 USD.

That gap is small in absolute terms and large as a proportion of a small account's expectancy. It also inverts with holding period: for an intraday trade the CFD is often cheaper because there is no financing and no commission, and for a position held for months the futures contract wins comfortably. Work out your own numbers on the margin calculator before you decide which instrument suits the way you actually trade.

Leverage is the same risk in both wrappers

Whichever you choose, the notional is what moves, not the deposit. A 400 USD margin controlling 20,000 USD of gold is 50:1, and a 2% adverse move erases the deposit entirely. Retail leverage caps differ by jurisdiction, and negative balance protection exists in some of them and not in others, so in the wrong combination a loss can exceed what you put in. The leverage calculator shows what a given deposit is actually controlling.

Before you open a commodity position, know four numbers: the contract or lot size, the value of a one-tick move, the margin required, and the overnight cost if you hold it. If any of the four is unknown to you, the position is not sized, it is guessed. The risk management guide covers how those numbers feed the rest of the plan.