The CFD and forex (FX) markets are places for traders to trade a trading instrument or can be called an Asset. Forex traders, banks, individuals, and investors trade these assets as financial instruments.
Assets are in a class with similar price fluctuations and characteristics but consisting of different securities. The following instruments are the main examples of assets traded in the FX and CFD markets.
Commodities
Commodities are a financial trading instrument that are sold and bought through future contracts in the CFD or Forex market. They are traded on an exchange that standardized the quantity and quality of any commodity traded.
Commodities are referred to raw materials that are mostly used in the production of services or goods. Those materials are sold in bulk.
Commodity trading in the CFD market is a good method for speculating in the financial market. The commodity can be traded through two methods including forward trading and cash methods.
Commodities that are settled on cash consist of a settlement date that is usually short. The commodities that are settled on a forward basis will be executed on the far-future settlement date.
Commodities that are mostly traded in both markets are precious metals (like copper, silver, and gold), energies (major natural gas and oil). And also, soft commodities from agriculture (like coffee, sugar, cocoa, and wheat).
Energies
In the global economy, this collection of commodities has the greatest impact. Examples of these tradable instruments are natural gas and crude oil.
Crude oil is an important energy for transportation in various cars, ships, and jets. It is also used in synthetic textiles, plastics, cosmetics, computers, and fertilizers.
On the other hand, for production purposes in manufacturing industries, natural gases are needed. It is also used in commercial and residential production and power generation.
Precious Metals
Copper, silver, and gold, are considered as rare commodities that are traded on the CFD and FX markets. There is a huge demand by speculation for this commodity.
Gold prices movements are in the opposite direction to the USD. It can be seen as an alternative to money. Old is used in some electrons and jewelry production. On the other hand, copper is used for building infrastructures and industrial production.
Agricultural Commodities
This commodity can be both traded or used. When it comes to the CFD and FX market, it can be speculated. These commodities are classified as soft commodities which include a large number of agricultural products such as coffee, wheat, and cocoa.
Currencies
Since currencies are traded in pairs, the increase in the value of one currency in pairs can affect other currencies. In both markets, this Trading instrument is traded by speculation.
When the currency value increases, traders will buy and sell it when the value decreases so that they can get returns. There are three main classes of currency pairs.
1. Major Currency Pairs and Minor Currency Pairs
The first class is called the major currency pair and consists of various pairs. They are such as USD/JPY (the United States and Japan), USD/EUR (the United States and Euro).
USD/CAD (the United States and Canada), GBP/USD (the United Kingdom and United States). USD/CHF (the United States dollar and Switzerland). USD/NZD (the United States and New Zealand), and USD/AUD (the United States and Australia).
Minor currency pairs include EUR/CAD, EUR/NZD, AUR/GBP, EUR/AUD, EUR/CHF. CHF/JPY, EUR/JPY, CAD/JPY, GBP/JPY. GBP/CAD, AUD/JPY, GBP/CHF, NZD/JPY, and GBP/AUD.
2. Exotic Currency Pairs
This class includes USD/SEK, USD/ZAR, USD/DKK, USD/ SGD, USD/HKD, USD/NWK, and EUR/TRY. All of these classes of currency pairs can be traded with a broker.
The instruments mentioned above are some of the tradable instruments in both the FX and CFD markets. Now, you can trade currency easily in the FX market with didimax forex broker.
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