Commodities: Gold, Oil, Gas, Wheat - Contract Specs

Hook: 4 Commodities, 4 Personalities, 4 Ways to Bust or Fortune

Gold (GC) can sit flat for 6 months then move $200 in 2 days after Fed decision. Oil (CL) can drop -$40 in one day like April 2020 and kill account. Natural Gas (NG) called “widow-maker” – its 80% annualized seasonal volatility can zero position in week. Wheat (ZW) depends whether it rains in Kansas.

If you don’t know tick value, trading hours and EIA/USDA reports, you don’t trade commodities. You gamble.

Table of Contents

1. Why contract specification is foundation
2. GC - Gold Futures - safe haven
3. CL - Crude Oil - volatility king
4. NG - Natural Gas - widow-maker
5. ZW - Wheat - weather market
6. Comparison table of 4 commodities
7. Market reports: EIA, USDA WASDE
8. Why it matters for trader
9. Market example: Gold trading after CPI
10. Case study: Gas NG Jan 2022 x5
11. How to apply - PLN + USD calculations
12. Common mistakes
13. Practical exercises
14. Checklist
15. Summary

Why Contract Spec Is Foundation?

Each futures contract has:

• Symbol: GC, CL, NG, ZW
• Exchange: COMEX, NYMEX, CBOT
• Size: 100 oz gold, 1000 bbl oil
• Tick size and tick value: minimum move and its USD value
• Margin: Initial and Maintenance
• Trading hours: when you can trade, when break
• Expiration months: and First Notice Date, Last Trading Day

Without knowing this you can’t calculate risk. Without risk – margin call.

GC - Gold Futures (COMEX)

Symbol: GC, Micro: MGC (1/10 size) Exchange: COMEX (CME Group) Size: 100 troy ounces (~3.11 kg) Quoted: USD per ounce (e.g., 2025.3) Tick size: 0.10 USD Tick value: $10 (0.10*100)

TickValue_(GC=TickSize × Size =0.10 × 100 =10 USD

Margin 2024-2025: Initial ~$11,000, Maintenance ~$10,000. MGC: ~$1,100 / $1,000.

Hours: Sun-Fri 6pm-5pm ET with break 5pm-6pm ET. Most liquid 8:30-11am ET (comex open) and 1:30pm ET fix.

Drivers:

• Real interest rates (TIPS 10Y). When real yield falls, gold rises. Correlation -0.8
• DXY (dollar). Strong dollar = weak gold (-0.6)
• Central banks buying physical (China, Poland NBP)
• Risk-off: wars, banking crisis

Seasonality: Strong Q1 and Q4, weak summer.

CL - Crude Oil WTI (NYMEX)

Symbol: CL, Micro: MCL (100 barrels =1/10) Exchange: NYMEX Size: 1000 barrels (~159,000 liters) Quoted: USD per barrel (e.g., 80.25) Tick size: 0.01 USD Tick value: $10 (0.01*1000)

TickValue_(CL=0.01 × 1000 =10 USD

Margin: Initial ~$7,000-9,000 (variable with volatility), Maintenance ~$6,500. MCL ~$700-900.

Hours: 6pm-5pm ET with break 5pm-6pm ET. Most liquid 9am-11:30am ET.

Factors:

• EIA Petroleum Status Report – Wednesday 10:30 ET (16:30 PL). Inventory change vs expectations – move 1-3 USD in 5 minutes.
• OPEC+ decisions
• Hurricanes in Gulf of Mexico
• Cushing, OK inventories (delivery point)

Fun fact: CL expires physically – you can get delivery to Cushing, OK. That’s why April 20 2020 fell to -$37.63 – no storage.

NG - Natural Gas (NYMEX)

Symbol: NG, Micro: MNG (1000 MMBtu) Exchange: NYMEX Size: 10,000 MMBtu Quoted: USD per MMBtu (e.g., 2.345) Tick size: 0.001 USD Tick value: $10 (0.001*10,000)

TickValue_(NG=0.001 × 10 000 =10 USD

Margin: Initial ~$2,500-4,000 (very variable!). Maintenance ~$2,300. MNG ~$250-400.

Hours: 6pm-5pm ET.

Drivers – most seasonal market:

• EIA Natural Gas Storage Report – Thursday 10:30 ET. Winter: larger draw = up. Summer: injection.
• Weather: 6-14 day NOAA forecasts – freeze on US east coast = heating demand x3.
• Hurricanes – production disruption in Gulf.
• LNG export – Freeport terminal.

Why widow-maker? Can go 2.00 to 9.60 in 6 months (2022 Ukraine war). Leverage 10:1 + $3k margin + daily ATR 5% = lottery.

ZW - Wheat (CBOT)

Symbol: ZW, Chicago SRW Wheat Exchange: CBOT Size: 5,000 bushels (~136 tons) Quoted: Cents per bushel (e.g., 650’0 =650 cents = $6.50) Tick size: 1/4 cent =0.0025 USD per bushel Tick value: $12.50 (0.0025*5000)

TickValue_(ZW=0.0025 × 5000 =12.50 USD

Margin: Initial ~$2,200-2,800, Maintenance ~$2,000. No standard micro but mini 1k available brokers.

Hours: 8pm-8:45am ET +9:30am-2:20pm ET day session.

Factors:

• USDA WASDE – 8-12 times year ~12:00 ET. World Ag Supply and Demand – NFP for grains. Can open limit up/down.
• Crop Progress – Monday 4pm ET – good/excellent %.
• Weather: drought in Kansas (HRW), Russia/Ukraine (30% global export), Australia.
• Black Sea shipping.

Limit up/down: CBOT daily price limits – e.g., wheat 40 cents. After limit trading halted or expanded.

Comparison Table of 4 Commodities

Market Reports - Must Know

Why It Matters For Trader?

1. Tick value = risk calc. Without it you don’t know “how much I lose per 1 tick”.
2. Margin = leverage kills. NG margin 3k but can do $800 loss per day (80 ticks). With 4 contracts margin call.
3. Hours = don’t leave position before report without plan. 80% retail blow-ups are EIA or WASDE without stop.
4. Micro contracts = your friend. 20k PLN (~$5k) account shouldn’t touch standard GC/CL, only MGC/MCL.

Market Example: Gold After CPI

March 12 2024 CPI higher than expected (3.2% vs 3.1%). GC drops 2180 to 2150 (-30 USD) in 30 min.

Trader account 50,000 PLN (~$12,500). Uses MGC (micro gold 10 oz, tick $1).

Entry short 2175, stop 2185 (+10 USD), target 2145 (-30 USD).

• Risk per contract: 10 USD *10 oz = $100 ~400 PLN
• Reward: 30 USD *10=$300 ~1,200 PLN RR 1:3
• Position: risking 1% =500 PLN can take 1 contract (400 PLN risk)
• Result: target hit in 2h, profit 1,200 PLN.

If used standard GC instead of MGC: risk=10*100= $1,000 ~4,000 PLN =8% account – too much.

Case Study: Gas NG Jan 2022 - x5 in 6 Months

Aug 2021 NG=3.5 USD. Winter 2021/22 mild but Russia limits gas to EU. Europe buys US LNG, US storage low.

EIA storage October: 5Y deficit -5%. NOAA forecast: polar vortex January.

NG price: Oct 5.0, Dec 4.2 correction, Jan 2022 5.8, June 2022 9.6 – peak!

Trader long 1 NG (10k MMBtu) from 4.00 to 8.00 = +4.00*10k = $40,000 profit (~160k PLN) with margin $3k – 13x margin! Other way – short at 9.0 drop to 2.0 Dec 2022 = 70k loss.

90% NG short accounts at top wiped because they didn’t understand NG can go 5x without 10% correction.

How to Apply - Workflow PLN + USD

Step 1: Choose 1 commodity to start (recommend GC or CL). Step 2: Check spec at cmegroup.com – note tick value, margin. Step 3: Calculate position for account in PLN/USD:

Position_(max = (Capital_(PLN * 0.01/Stop_(USD * Size * FX_(USD/PLN

Example 30k PLN account stop 1.5 USD on CL (1.51000=$1500): 30k0.01=300 PLN, 1500 USD~6000 PLN – too large! Must use MCL where $150=600 PLN – closer but still too much, so smaller stop or larger account.

Step 4: Set alarm for EIA/USDA calendar. Never enter 10 min before report without defined position.

Step 5: Trade only peak hours (8:30am-2:30pm ET) where bid/ask spread narrowest.

Common Mistakes

1. Trading NG as first market. 5% daily not play. Start with GC.
2. Mis-translating tick value. ZW tick $12.50 not $10 – 25% risk difference.
3. Holding CL in expiration week. Forget First Notice and broker closes you with gap -$500.
4. Ignoring limits. ZW limit up 40c – if short and WASDE bullish you can’t exit all day.
5. No knowledge of micro. People trade GC $11k margin with $15k account – one bad candle and account gone.
6. Not converting USD/PLN. Profit $1000 but dollar down 5% = 200 PLN less in PLN.
7. Trading during EIA without stop: “It will be fine” ends -35% account.

Practical Exercises

Exercise 1: Account 25,000 PLN (~$6,250). Want 1 MGC long stop 15 USD (1510=$150). How many % account risk? ($1504=600 PLN/25k=2.4% – too much, reduce to micro or stop $6).

Exercise 2: Check EIA calendar next week. Note PL time, previous crude inventories and Bloomberg consensus.

Exercise 3: Calc how many ticks is daily ATR for CL if ATR=$2.2. Tick 0.01 → 220 ticks*$10=$2200 daily range per contract! Can you afford?

Exercise 4: Find First Notice Date for GC Dec 2025 at cmegroup.com. When must close to avoid delivery?

Checklist Before Entering Commodity

• Know tick size, tick value, margin Initial/Maintenance for this contract
• Checked micro vs standard – matched to PLN account
• Know when EIA/USDA/WASDE – not entering 5 min before without plan
• Know First Notice Date / Last Trading Day
• Position calculated: risk max 1-2% PLN account
• Checked COT percentile for market (lesson 01)
• Checked contango/backwardation curve (lesson 02)
• Bid/ask spread <2 ticks in liquid hours

Summary and Next Steps

Gold GC is macro instrument driven by real rates. Crude CL is EIA + OPEC + hurricanes. Gas NG is weather x100 and widow-maker. Wheat ZW is USDA WASDE and weather + Black Sea geopolitics.

Key is knowing specs: size, tick value, margin, hours and reports. Without it no trading, only roulette.

Next lesson: ES, NQ, DAX – most liquid indices globally, their tick, beta vs SPX, correlations, triple witching and limit up/down that halt market.

Homework: Open TradingView add GC1!, CL1!, NG1!, ZW1! and for 3 days watch how they behave around 8:30am-12pm ET. Note ticks.