FXCM adds US and UK spot oil trading CFDs
Retail FX broker FXCM Group, a unit of Jefferies Financial Group, has announced the launch of two new commodity CFDs, UKOilSpot and USOilSpot.
FXCM’s two new spot oil products will represent the current spot price of West Texas Intermediate and Brent Crude. Customers may leave positions open indefinitely and avoid potentially thin liquidity in the days leading up to contract expiration.
The move comes after the monthly-expirations futures prices for crude oil went haywire over the past few months, dipping into negative territory as those owning the contracts went scrambling to find scarce storage for the oil as demand dried up during the global Covid-19 lockdowns. Some retail traders made an absolute killing, but some lost a lot as crude futures prices tumbled in an unprecedented fashion, then recovered. (Some brokers as well took a big bath as crude prices went negative).
Customers now have a choice. They may trade the current contracts, USOil and UKOil which have monthly expirations as they are based on the front month futures contracts. Alternatively, FXCM customers may trade perpetual USOilSpot and UKOilSpot positions which do not expire.
Both UKOilSpot and USOilSpot have the same CFD contract sizing and pip costs as FXCM’s Futures Oil CFDs. The spot products have a daily financing fee for holding positions past 5pm EST, while existing futures products do not.
Brendan Callan, CEO of FXCM commented:
“With the collapse of oil prices recently, many traders are thinking twice about which energy product to trade when looking to speculate. With the expansion of our oil offering, FXCM is catering to the increasing demand to trade oil markets, while providing traders with the opportunity to mitigate the risks that are associated with the futures markets.”