Industry NewsAugust 28, 2019

CMC Markets Launches Three Commodity Indices: Energy, Agricultural, Metals

Commodity Indices

CMC Markets‘ commodity indices give customers the opportunity to invest in multiple raw materials simultaneously and cost-efficiently, with just one transaction, while reducing the volatility risk of individual commodities.

CMC Markets has launched three new indices for the energy, agricultural and precious metals sectors, as the broker offers commodity indices as a cost-effective way to diversify and cushion the volatility risk of individual commodities.
With each index providing exposure to a different area of the commodities market, the Energy Index includes crude oil (WTI and Brent), natural gas, and other refinery products; the Agricultural Index comprises the 12 of the most important agricultural commodities, including wheat, corn, soybeans, sugar, and coffee; and the Precious Metals index contains gold and silver, as well as platinum and palladium.

The individual commodities are weighted according to their average daily trading value of the nearest six futures contracts. Gold and silver are each weighted at 35% in the Precious Metals index, with platinum and palladium weighted at 15%.

“Gold and oil, in particular, have moved more and more into traders’ focus in recent weeks. While precious metals are being hailed as a safe haven during turbulent times on the stock markets, the oil price is reacting to the recent rise in geopolitical risks. 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”, said Simon Campbell, Group Head of Trading. “In addition, our Precious Metals and Agricultural indices offer similar diversification benefits for these commodity sectors”.
In June, CMC Markets introduced three new crypto indices to its trading offering, each made up of a different group of cryptocurrencies, as diversification provides broad exposure and mitigates risk of volatility in specific coins. ‘All Crypto Index’, ‘Major Crypto Index’ and ‘Emerging Crypto Index’ are now available for trading.

Earlier this year, CMC Markets updated its cryptocurrency offering to include seven new digital currencies – taking the total number of coins available to trade to twelve – and has lowered the margins for professional clients across all their original cryptocurrencies as well as spreads for both retail and professional clients across all their original cryptocurrencies. The broker first launched cryptocurrency spread bets and CFDs to its professional client base in March 2018. In August 2018, CMC Markets expanded the offering across its retail client base, also allowing clients to take a position on the original Bitcoin and Ethereum cryptocurrencies paired against the US dollar.

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