Key Takeaways from Lesson 12
- Gold (XAU/USD) contract size is 100 ounces; a $1 price change on a standard lot equals $100.
- Reduce your position size on Gold and Oil compared to forex pairs to manage elevated daily dollar volatility.
- Check whether your oil CFD is a spot cash contract or a monthly futures contract subject to rollover.
- Crypto CFDs carry high overnight holding fees and should not be held as long-term buy-and-hold investments.
Contracts for Difference (CFDs) allow traders to speculate on the price movements of physical commodities (Gold, Silver, Crude Oil) and cryptocurrencies (Bitcoin, Ethereum) without taking physical delivery or managing crypto private keys. However, their contract specifications, point values, and overnight holding rules differ sharply from standard currency pairs.
Contract Specifications: Gold, Crude Oil, and Bitcoin
| Instrument | Symbol | Contract Size per 1.0 Lot | Point Value per 0.01 Micro Lot | Key Market Drivers |
|---|---|---|---|---|
| Spot Gold | XAU/USD | 100 troy ounces | $0.10 per 10-cent move ($1.00 move = $1.00 P&L) | Real US interest rates, USD index strength, geopolitical safe-haven demand |
| WTI Crude Oil | USOIL / XTIUSD | 1,000 barrels | $0.10 per 1-cent move ($1.00 move = $10.00 P&L) | OPEC+ production quotas, global industrial demand, US inventory reports |
| Bitcoin CFD | BTC/USD | 1 Bitcoin | $0.01 per $1.00 move ($1,000 move = $10.00 P&L) | Institutional ETF inflows, macroeconomic liquidity, crypto market sentiment |
Risk Management Rules Specific to Commodities & Crypto
3 Critical Risk Rules for Commodity and Crypto CFDs
- Account for Massive Daily Dollar Volatility in Gold. Gold regularly fluctuates $30 to $60 in a single day. A 0.10 lot position swings $300 to $600 daily. Always reduce your lot size to one-third of your normal forex volume.
- Watch for Futures Contract Rollover on Crude Oil. Many brokers trade oil as a monthly expiring futures CFD. Unclosed positions are automatically rolled over, incurring a price adjustment fee.Tip: Check your broker's monthly CFD rollover schedule to avoid unexpected cash balance deductions.
- Factor in High Crypto Overnight Financing Fees. Holding leveraged Bitcoin or Ethereum CFDs long-term incurs annual financing rates between 15% and 25%. Crypto CFDs are strictly designed for short-term swing trades.
Brokers mentioned in this lesson: published data
Figures come from Brokeli's published research snapshot and can differ by country and legal entity. This is not a recommendation.
Frequently asked questions
Do I own physical gold or real Bitcoin when trading CFDs?
No. A CFD is a derivative contract tracking the underlying asset's price. You cash-settle price differences without holding physical metal or blockchain wallet keys.
Why is crypto CFD leverage restricted to 1:2 in the UK and EU?
Financial regulators (FCA and ESMA) instituted strict 1:2 leverage caps to protect retail traders from the extreme price swings inherent in cryptocurrency markets.