Customers of CMC Markets willing to gain more exposure to the commodities market are getting more options from their brokerage. The company announced this morning that it is adding new commodities indices designed to provide diversified exposure to different commodities.
CMC Markets is adding indices focused on three distinctly different commodity plays. The Energy Index is based on the prices of oil, natural gas and other refinery products. The Agricultural Index includes 12 of the most-important soft commodities. Finally, the precious metals index is going to be based on the prices of gold, silver, platinum, and palladium.
The goal of CMC Markets is to provide its clients with a relatively less-volatile way to divest their holdings with indices, instead of extra exposure volatility of individual commodities. In addition, the company claims that its customers will save on commissions with the new index products.
Commenting on the launch of the new products, the Group Head of Trading at CMC Markets, Simon Campbell, said: “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.”
The Energy Index is composed of both popular types of crude oil: West Texas and Brent. The instrument also includes heating oil, natural gas, gasoline, and diesel prices.
Some of the most-traded soft commodities like wheat, corn, soybeans, sugar and coffee are among the 12 components of CMC’s Agricultural Index. It also includes prices of soybean meal, soybean oil, raw sugar, cotton, cocoa, white sugar and oats.
According to the company, individual commodities are weighted according to their average daily trading value of the nearest six futures contracts. As to the precious metals index, gold and silver are each weighted at 35%, while platinum and palladium are each weighted at 15%.
Margin rates on the products are starting from 10 percent. The brokerage provides in-depth details about the weighting of the individual commodities in the respective indices.