Question:What's the trading condition of commodities on LMFX MT4?
- Trading Conditions of Commodities on LMFX MT4
Trading Conditions of Commodities on LMFX MT4
LMFX offers 7 different Commodities instruments which are Coffee, Copper, Corn, Palladium, Platinum, Sugar and Wheat.
Each commodity has got different conditions so you may want to make sure that you understand the whole condition before stat trading.
1. Margin Requirement
LMFX will require fixed margin for trading commodities.
So even if you have set maximum leverage in your account, that leverage is not applicable to the trading of commodities.
Please refer to the below table.
|Commodities||Required Margin||Contract Size (1 lot size)|
|Coffee||$1400 per 1 lot||37500 Lbs|
|Copper||$1500 per 1 lot||25000 Lbs|
|Corn||$700 per 1 lot||5000 Bushels|
|Palladium||$1500 per 1 lot||100 Troy Oz|
|Platinum||$1500 per 1 lot||50 Troy Oz|
|Sugar||$700 per 1 lot||112000 Lbs|
|Wheat||$1400 per 1 lot||5000 Bushels|
As you can not leverage the commodity trading as you want, you may be required more margins than you have though.
LMFX has set the stop out % to 20%(for Premium account) and 15%(for Fixed and Zero account), so if the margin level in your account reaches that % all your open positions will be liquidated(closed) by the system automatically.
2. Spread and Trading Commissions
There is no extra commissions charged for trading of commodities by LMFX, so the spread(variable) would be the only thing you will need to cover while trading.
The spreads are not fixed but variable. Please refer to the below table.
|Commodities||Average Spread||Trading Commissions|
3. High Volatility and Wider Spread
In some certain situations, like when an important economic data is released or around weekends, due to the extremely high or low volatility might cause the spread to widen up.
In these situations, the spread could even go wide more than 20 pips or even more.
LMFX has set certain limitations in terms of slippage and if due to the slippage, the execution price is excessively slipped from the original order price, LMFX may simply reject the order itself.
This is to protect clients to not execute orders with different prices than the price they have expected.
4. Roll over for Commodities
There are expiration dates monthly or every 2 – 3 months for all commodities instruments.
All open positions at the expiration date will be closed at the last available market price, so it does not roll over to the next contract.
LMFX does not interfere or manipulate traders’ positions, but the system will automatically close open positions only when the contract expires or the margin level goes too low.
For all open positions held over night, you will be charged or credited swap points according to the interest rate from the liquidity providers of LMFX.
Unless you hold a swap free account, you will be charged or credited every night at server time 00:00.
The swap points will be tripled on Wednesdays just like other financial instruments.(The swap points for Index CFDs are tripled on Fridays.)
5. Market Hours
Not like the Forex exchange market, the commodity market is not opened 24 hours a day but it is different for each instrument.
|Commodities||Market Hours(GMT+2)||Breaking Hours(GMT+2)|
|Copper||Monday 01:00- Friday 24:00||Daily 00:15 – 01:00|
|Corn||Daily 03:00-21:00||Daily 15:45-16:30|
|Palladium||Monday 01:00- Friday 24:00||Daily 00:15 – 01:00|
|Platinum||Monday 01:00- Friday 24:00||Daily 00:15 – 01:00|
|Wheat||Daily 03:00-21:15||Daily 15:45-16:30|
Please note that all the pending orders of commodities will be cancelled when the market is closed or at the break time.
All the open positions will be left opened as usual.
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