Commodity Trade

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  1. US Crude is trading at 66.20 / 26. You think that oil may hit $70 in the next couple of weeks so you decide to place an up bet at £3 per point
  2. The NTR on US Crude is 140. NTR is applied to Index, Treasury, Commodity, Forex, Sector and Bullion Bets and is a simple method of calculating an Initial Margin for less volatile instruments. Each instrument that uses NTRs has an NTR value which you simply multiply by your stake to determine your margin requirement. Therefore the total margin requirement will be £420 (140 x £3)
  3. You decide to close the trade 3 weeks later when the price of US Crude hits $72.08 / 14
  4. There is no financing to pay as US crude is a futures contract. The interest charge has been built into its spread as part of the cost of carry. There is no overnight financing charge to pay
  5. Your total profit will be (72.08 - 66.26 = 582 points x £3) = £1746

Please remember that had the market moved against you, you would have made a loss on this trade.

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