With oil trading experiencing a surge in recent months, FXCM Group, LLC, announced this Wednesday that it has launched two new contracts for difference (CFD) products – UKOilSpot and USOilSpot.
FXCM is an online trading provider of foreign exchange (forex), CFD and cryptocurrency trading. The two new spot oil products will represent the current spot price of West Texas Intermediate and Brent Crude.
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FXCM new products have no expiration
According to the statement from the international trading provider, customers who choose to trade these new products can leave their positions open indefinitely in order to avoid potentially thin liquidity in the days leading up to the contract expiration.
With the addition of the new contracts, clients of FXCM can trade the broker’s existing contracts, USOil and UKOil, which have monthly expirations and are past on the front-month futures contracts, or they can trade the two new products announced today, which do not expire.
Oil products in demand
As Finance Magnates reported, in April of this year, for the first time in history, oil prices went negative with the price of May WTI futures contracts plummetting as the lockdown measures adopted by the coronavirus pandemic significantly reduced the demand for oil, resulting in much higher supply than demand.
Since this event, a number of trading and liquidity providers have launched new oil products. eToro created a new oil portfolio, called OilWorldWide, which gives retail investors exposure to 20 global companies across the oil sector, and IS Prime developed two new proprietary products the US Oil Index and the UK Oil Index, which are aimed to combat the inability of brokers’ trading systems to accept negative rates.
Commenting on the new product, Brendan Callan, CEO of FXCM said in the statement: “With the collapse of oil prices recently, many traders are thinking twice about which energy product to trade when looking to speculate.
“With the expansion of our oil offering, FXCM is catering to the increasing demand to trade oil markets, while providing traders with the opportunity to mitigate the risks that are associated with the futures markets.”
UKOilSpot and USOilSpot have the same CFD contract sizing and pip costs as FXCM’s Futures Oil CFDs, the company said. However, the new spot products do have a daily financing fee for holding positions past 5 pm EST.