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Commodities versus cross pairs with iForex

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  • Arcanebringer
    replied
    You're right, but first thing - they have just declared it. It should take some time for companies to develop product that could compete with oil. And second thing is that I said above - energy crisis' just started, it can last for long and this fact can hold prices on the current level or above.

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  • Agajurus
    replied
    But Europe declare to invest in "green" energy. And that is a big market for the whole world.

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  • Arcanebringer
    replied
    As long as OPEC is controlling production of oil by the current rules, I don't think the price will decline a lot. Moreover it looks like energy crisis is has just begun.
    By the way, oil was, is and I guess will be very volitile product due to its indispensability in the future, at least for now.

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  • Agajurus
    replied
    And what about oil? There are so much noise about it few last weeks. What do you think?

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  • Arcanebringer
    replied
    at least we have the same opinion about broker's conditions

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  • Kelune
    replied
    I don't think people trade it more tbo. But iForex has very sweet costs for crosspairs for sure.

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  • Arcanebringer
    replied
    Thank you for detailed response. Now that makes sense for me.
    I don't think such operations are possible with crosspairs. But conditions are very suitable for currencies at iForex. Maybe that's why people trade it more than futures.

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  • Kelune
    replied
    Yes and no
    The calendar spread is about the difference in price between two futures by time.
    Let me explain by example of one month future calendar spread. If you own one oil futures with an expiration in november then buying a calendar spread will give you a one oil futures with expiration in december, because, as said above, calendar spread is simultaneous selling one futures and buying another, in this case it is selling november and buying december. But even if you don't have any positions, the buying calendar spread will give you sell in november and buy in december, hence you wil have position with two futures. Hope that was clear

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  • Arcanebringer
    replied
    By the way, do you have to posses any futures position (long or shot) to make operations with this calendar spread?

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  • Kelune
    replied
    Originally posted by Agajurus View Post
    I would like to ask, is trading you talked about better than cross pairs? I think I heard something about it. I tried trading cross pairs with iForex and it looked nice.
    I wouldn't say so. I would say it is different because it is different trading products. But it offers a number of strategies once you learn its pecularities.

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  • Agajurus
    replied
    I would like to ask, is trading you talked about better than cross pairs? I think I heard something about it. I tried trading cross pairs with iForex and it looked nice.

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  • Kelune
    replied
    That's right, it really has. Futures usually are used to hedge another asset, for example stock. And it's not as useful as stock if we talking about investment due to finite lifetime. Moreover futures don't pay dividends.
    But some people keep their funds this way:
    - they buy some futures
    - when it's close to expiry date they sell it and buy futures of the same product, but next date of expire
    That method is called calendar spread. It's simultaneous buy and sell futures with the same base product, but different expiry date. It is used very often by those who trade commodities futures. For example oil have monthly futures. Hence, in order to possess this product's futures in the next month, trader should use calendar spread at the end of the month

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  • Agajurus
    replied
    Sounds a bit complicated for me. Isn't futures just expire on the particular date? I remember someone told me futures isn't good for investing because it has expiry date

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  • Kelune
    replied
    Speaking of gold, some say the opposite things that gold is the best investment product. I think that depends on trader if it is comfortable to trade this particular product.
    Futures have its time period - expiry date, so it could be tough for some people to understand how to invest in it, but the main thing is that you invest in more in base product and then you can just roll to the next expiry date via calendar spreads

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  • Agajurus
    replied
    Sorry for interrupting you guys, but since you said metals are good for long term investment i have a question: is there some specific moments about that? I've small experience in trading, but for now i'm planning to invest in metals. Some people said that metals and especially gold are not good for investment now, but i still want to try it in the long term. Futures have many benefits, but also could cause a big losses, so i want to figure it out

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