If you are thinking of investing in natural gas, you should take into account that there are several ways to do so. For example, you can buy natural gas futures for a short-term revaluation or you can buy them for a few years to make a long-term capital gain. In addition, there is an opportunity to invest in natural gas through online trading with Contracts for Difference or CFDs.
In this article, you will learn how you can invest in natural gas with Plus500 an internationally recognized broker, through which you can use the internet where you can do it in a totally transparent and secure manner via any type of device.
How to Trade Natural Gas CFDs on Plus500
Online natural gas trading on Plus500 is done through a very simple procedure. Plus500 has an easy-to-understand and intuitive interface, which can certainly be used by beginners as well.
If, for example, you wish to select a specific raw material, you just need to:
- Go to the “Shop” screen
- Choose the “Raw materials” category
- Click the only available subcategory “Popular”.
If, for example, you wanted to trade natural gas, once the sub-category has been selected, the available tool would be shown in the central part of the screen (see image below) from which we could select natural gas.
When you get here, you can decide whether to buy or sell natural gas on Plus500 depending on your analysis of a possible rise or fall.
What does it mean to buy Natural Gas on Plus500?
Investing in Natural Gas on Plus500 means opening a long position by buying a “Buy” type CFD. Plus500 is a CFD broker. So when you buy natural gas CFDs on this platform, your only objective is that the price of the underlying asset listed on the stock exchange should follow an upward trend.
The CFD follows the price of that same product. So if the speculator/investor opens a “Buy” position, profits will be made when that price value increases.
What does it mean to sell Natural Gas on Plus500?
Natural gas on Plus500 can also be sold by opening a “Short” position through buying a “Sell” CFD. By “selling” a CFD of a product on Plus500, you are trying to make a profit from the expected future price drop.
The CFD follows the price trend of this product. So if the trader has opened a sales position, the trader’s profits occur when the price of that product decreases.
Executing a Natural Gas Trading Order on Plus500
After performing your market analysis and deciding which operation to execute (Buy or Sell), you can move on to the real order. Below I will show you how to do it. Remember that these are Natural Gas CFDs and not traditional futures.
Below is a window containing the information on how to open a position on buying Natural Gas on Plus500.
Here are some aspects that you should pay attention to:
- Contracts: indicates the number of CFDs of natural gas that you wish to trade
- Use leverage: this is leverage applied. CFDs are essentially leveraged instruments that allow you to trade a value of natural gas higher than the investment actually made.
- Margin: this value indicates the actual value (regardless of the leverage) that the operator uses for this type of procedure.
- Stop Limit: A tool used to establish the maximum profit limit. Once the figure goes beyond the limit imposed, the position is automatically closed.
- Stop Loss: an instrument very similar to the first one. Once the figure goes beyond the limit imposed, the position is automatically closed.
- Guaranteed closing: a very interesting option that is not available for all instruments. More precisely, it allows you to close a certain position in the event of excessive fluctuations.
- Buy / Sell: With this button, you can execute the previously requested transactions.
How to Close a Natural Gas Trading Position
When you really wish to open a position, I showed you that you have to click on the button that appears at the bottom of the order execution window.
On the other hand, when you want to close it, because the result is now acceptable or because you choose not to keep it open after some unfavorable results, you have to click the “Close” button. You can see it on the platform, under the raw material you are operating in the main window. If you have opened a multiple position in the same financial instrument, you will find several “Close” buttons and you can decide to close those positions individually.
In this respect, it is very important to keep in mind that to close a position, it is essential to use the “Close” button because less experienced traders can open an opposite position (for example, open a “Sell” position in order to close a “Buy” position). This procedure is not correct.
These are general tips, but for more complete and advanced training, please read our complete guide to CFD trading.