Sugar No 11

To work out how much margin you need to trade a commodity market, you divide the full value of your position by its margin requirement. Say, for example, that you want to open an oil position worth £5,000 and oil has a margin requirement of 10%. You’d need (10% of £5,000) £500 as margin.

How you calculate the full value of your trade depends on how you’re trading the commodity. With spread betting, for example, you multiply your stake by the market’s current price. With CFDs, it’s the number of contracts you’re trading and the value of each individual contract.

Learn more about how to trade commodities.

Anyone can trade commodities, as long as they meet the requirements to open a City Index account. Commodity trading is leveraged, though, which means it’s riskier than traditional investing. Learn more about the risks of spread betting and CFD trading.

With City Index, you can trade commodities alongside stocks, indices, forex and more – all on a single platform with one login. All City Index clients get access to our full range of commodities, including 25+ commodities.

To get started, open your trading account.

Commodity trading can be a good option for beginners, as long as you understand the risks involved and have a solid trading strategy in place. If you’re new to the markets, though, we’d recommend going through the City Index Academy and trying out trading risk-free in our free demo before opening a live account.

You can use your City Index demo to buy and sell our full range of markets, including commodities, with virtual capital. It’s a great way to see which asset classes are a good fit for you without risking any real capital.