CMC Markets Launches 3 Commodity Indexes
CMC Markets, which operates a trading platform for forex and contract of difference (CFD) trading, recently listed three new commodity indices. Thus, CMC clients are able to get exposure to the energy market, agricultural commodities, and precious metals.
CMC is Expanding It's Asset Index
Up until recently, CMC clients could trade the CFDs of 29 separate commodities, including energy, and precious metals, and agricultural products, among others. Now traders can also opt for commodity indices that track the three mentioned groups. The new products allow CMC clients to diversify their investment and mitigate the volatility risks.
Simon Campbell, head of trading at CMC Markets, commented on the launch, saying that gold and oil have been in the spotlight in recent weeks. The two most popular commodities have reacted to the Sino-US trade conflict and the rise in geopolitical risks. The executive added:
However, since oil prices and other energy commodities such as natural gas do not generally react equally well or in the same direction, our new Energy Index offers a good opportunity to spread risk across multiple commodities.
CMC’s New Indices in Detail
The forex and CFD platform provider added the following commodity indices:
The available margin rate limit is 10% with each trading instrument.
CMC Markets explained that the goal of the new additions was to offer traders a less-volatile way to invest in commodities. Rather than assuming the increased risks of individual commodities, traders can diversify their exposure by investing in an entire sector.
The commodity constituents of the three indices are weighted based on their average daily trading value of the nearest six futures contracts. When it comes to precious metals index, gold and silver are weighted at 35% each, while platinum and palladium collectively make 30% of the index, splitting the weight equally.
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