Company

Spread

for COCOA

Min.

Deposit

Platforms

Offered

Account

Types

Spread

Type

Funding

Methods

Customer

Support

Execution

Details

Plus500

Offers two ways to trade: CFDs, Forex

 Listed on the LSE AIM market
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£100Min. Deposit Learn More
  • MT4
  • WebTrader
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  • Fixed
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Trust Score:

B

Used by:

155,000

Established in:

2008

Regulated by:

Financial Conduct Authority (F...

AvaTrade

Offers four ways to trade: Forex, Spread betting, CFD trading, and options trading

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€/£/$100Min. Deposit Learn More
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Trust Score:

AAA

Used by:

200,000

Established in:

2006

Regulated by:

Central Bank of Ireland, ASiC ...

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Your capital is at risk

eToro

Offers two ways to trade: CFD trading, and social trading

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$50Min. Deposit Learn More
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Trust Score:

AAA

Used by:

6,000,000

Established in:

2006

Regulated by:

Financial Conduct Authority, C...

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ETX Capital

Offers three ways to trade: Forex, Spread betting, CFD and Binary options

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$100Min. Deposit Learn More
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IG

Offers four ways to trade: Forex, Spread Betting, CFD, Stock trading and Binary options

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£200Min. Deposit Learn More
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London Capital Group

Offers one way to trade: Forex

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$100Min. Deposit Learn More
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See Details
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City Index

Offers three ways to trade: Forex, CFDs, Spread Betting

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£25Min. Deposit Learn More
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See Details
Your capital is at risk

XM

Offers five ways to trade: Forex, Commodities, Equity Indices, Precious Metals, Energies

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$5Min. Deposit Learn More
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See Details
Your capital is at risk

Admiral Markets

Offers two ways to trade: Forex, CFDs

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Your capital is at risk
$200Min. Deposit Learn More
  • MT4
  • WebTrader
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See Details
Your capital is at risk

EasyMarkets

Offers one way to trade: Forex

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Your capital is at risk
$1Min. Deposit Learn More
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Your capital is at risk
CFDs are leveraged products and can result in the loss of your capital. All information collected on 1/11/2017.
Cocoa

The Ultimate Guide to

Choosing a Broker
For Cocoa

Not sure which broker is right for you?

Don’t worry - we’ve got you covered. In this guide, you’ll learn:

Ready?

Part 1

Why Choose Plus500
For Cocoa?

Plus500 scored best in our review of the top brokers for cocoa, which takes into account 120+ factors across eight categories. Here are some areas where Plus500 scored highly in:

  • 9+ years in business
  • Offers 2000+ instruments
  • A range of platform inc. Web Trader, Tablet & Mobile apps
  • 24/7 customer service
  • Tight spreads from 0.01% pips
  • Used by 155,000+ traders
  • Offers demo account
  • 1 languages
  • Leverage up to 1:300

Plus500 offers two ways to trade: CFDs, Forex. If you wanted to trade COCOA through copy trading or other means, skip to part two.

The two most important categories in our rating system are the cost of trading and the broker’s trust score. To calculate a broker’s trust score, we take into account a range of factors, including their regulation history, years in business, liquidity provider etc.

Plus500 have a B trust score, which is good. This is largely down to them being regulated by Financial Conduct Authority (FRN 509909) and Cyprus Securities and Exchange Commission (License No. 250/14), segregating client funds, being established for over 9 years, and much more. For comparison:

Trust Score comparsion

Plus500 AvaTrade eToro
Trust Score B AAA AAA
Year Established 2008 2006 2006
Regulated by Financial Conduct Authority (FRN 509909) and Cyprus Securities and Exchange Commission (License No. 250/14) Central Bank of Ireland, ASiC , FSA, FSB and BVI Financial Conduct Authority, CySEC
Uses tier 1 banks
Company Type Public Private Private
Segregates client funds

The second thing we look for is the competitiveness of the spreads, and what fees they charge. We've compared these in detail in part three of this guide.

Part 2

Who Plus500 is (& Isn’t)
Suitable For

As mentioned, Plus500 allows you to trade in two ways: CFDs, Forex.

Suitable for:

  • CFD Trading
  • Forex Trading

Not Suitable for:

To trade with Plus500, you'll need a minimum deposit of $1. Plus500 offers a range of different account types for different traders including a micro account, mini account, .

Finally, Plus500 isn't available in the following countries: Belgium, US, Canada some Arab and Middle eastern countries, China, Singapore, Indonesia, Philippines. They do not offer islamic accounts either.

Part 3

A Comparison of Plus500 vs. AvaTrade vs. eToro


Want to see how Plus500 stacks up against AvaTrade and eToro? We've compared their spreads, features, and key information below.



Spread & fee comparsion

The spreads below are illustrative. For more accurate pricing information, click on the names of the brokers at the top of the table to open their websites in a new tab.
Plus500 AvaTrade eToro
Fixed Spreads
Variable Spreads
EUR/USD Spread 0.01% 1.0 3.0
GBP/USD Spread 0.01% 1.8 4.0
Crude Oil Spread 0.08% 0.03 5.0
Gold Spread 0.03% 0.60 45.0
DAX Spread 0.01% 1.5 100.0
FTSE 100 Spread 0.02% 1.0 100.0
S&P500 Spread 0.02% 0.25 100.0

Comparison of account & trading features

Plus500 AvaTrade eToro
Spread type Fixed AAA AAA
EUR/USD Spread 2008 2006 2006
EUR/GBP Spread Financial Conduct Authority (FRN 509909) and Cyprus Securities and Exchange Commission (License No. 250/14) Central Bank of Ireland, ASiC , FSA, FSB and BVI Financial Conduct Authority, CySEC
Crude Oil Spread
Gold Spread Public Private Private
DAX Spread

Part 4

Cocoa as a Traded Commodity

Cocoa is classed as a soft future in the commodities market alongside coffee, cotton, sugar and other products.

Over 4 million tonnes of Cocoa is produced yearly making it one of the most valuable agricultural commodities in the world today. Africa is the biggest producer of Cocoa making up 68% of the world’s supply, led by the Ivory Coast, Ghana, Nigeria and Cameroon.

It is important to note the countries where this commodity is produced in the largest quantity, as any factor that affects production in these countries will impact the global supply of the product. For example, the price of cocoa soared during the crisis which followed the controversial presidential elections in Ivory Coast in 2011. During the crisis the prices jumped 15% from $2,900 to $3,699 per tonne (source).

price chart of cocoa futures - 2011

Over 7.3 million tonnes of chocolate was consumed in 2015/2016 and with no slow down in sight, global demand for cocoa which is a major ingredient for chocolate is likely to increase. In the UK, chocolate must legally contain a minimum of 20% cocoa solids.

Fundamental Influences of Cocoa

Being an agricultural commodity, cocoa is subject to several fundamental influences. These are:

  • Factors affecting its production such as weather patterns, drought, disease. Severe flooding or drought, as well as diseases such as the cocoa black pod disease, reduce the production yields. Reduced yields reduce supply, which causes prices to rise.
  • Increased production will increase global supply and lower prices.
  • Conflict in areas of production cause reduced supply and can have a severe upward impact on price.

How is Cocoa Traded?

Cocoa is traded as a futures contract on commodities exchanges (Intercontinental Exchange or ICE and NYSE Liffe, operated by Euronext) and electronic commodity trading platforms. This means that there are two sets of market trading hours on any trading day.

Cocoa is a bi-directional market; traders can profit from rising or falling prices. To profit from rising prices, the trader goes long or buys a cocoa contract. To profit from expected falling prices, the trader goes short or sells the contract.

What is the difference between trading Cocoa as a CFD vs Futures Contract?

With a CFD firm like London Capital Group, a trader can trade with a much smaller amount of capital in comparison to trading on a traditional futures exchange like the ICE exchange. With a single contract for a Cocoa future starting at 10 metric tonnes, there is a significant difference in the required capital costs. For example:

The minimum trade for US Cocoa Futures using a CFD broker LCG could be up to 20 times lower, with a minimum trade of 0.1 lot (contract), the smallest traded contract size would be 1 tonne vs 10 tonnes. Combined with the leverage offered by a CFD broker, the trader is only required to come up with a percentage of this amount as margin for the trade, 2% in the case of LCG.

So assuming a trader wants to go long on a single US Cocoa Future as a CFD, the trader would only need $41.56 to execute the minimum trade based on the price of US Cocoa being $2,078(30 January 2017 value on the ICE exchange). $2,078*1*.02=$41.56 (Price per tonne * minimum contract size * margin)

If a trader was to be approved to trade on the ICE futures exchange, the smallest single contract would cost $20,780,=$2,078*10. (Price per tonne * minimum contract size)

*The maintenance margin required by ICE for a Cocoa contract is $1,450 and an initial margin of $1,595, so using the margin offered by ICE the minimum would be $3,045.

Details of Cocoa Futures for ICE and for a CFD Broker (LCG)

London Capital Group (LCG) offers US Cocoa Futures contract for their clients with the following details:

London Capital Group Trading Conditions
Market Trading hours Min spread Min trade size
US Cocoa 09:45-18:30 6* 0.1 lot
Unit risk Value of 1 pip/lot Min Margin Guaranteed Stop change
0.01 lot $10 2% 10

*All information collected from https://www.lcg.com/uk/, see website for full terms and conditions. Your capital is at risk. Last updated on February 6, 2017.

US Cocoa Futures Contract Details on the ICE exchange

Cocoa Futures: Market Specification
SYMBOL CONTRACT SIZE PRICE QUOTATION
CC 10 metric tons Dollars per metric tons
CONTRACT LISTING MINIMUM PRICE MOVEMENT SETTLEMENT
March, May, July, September, December $1.00/metric ton, equivalent to $10.00 per contract. Physical Delivery
FIRST NOTICE DAY LAST TRADING DAY LAST TRADING DAY
Ten business days prior to first business day of delivery month. Ten business days prior to last business day of delivery month One business day prior to last notice day.
TRADING HOURS
CITY TRADING PRE-OPEN
NEW YORK 4:45 AM – 1:30 PM04:45 – 13:30 8:00 PM20:00
LONDON 9:45 AM – 6:30 PM09:45 – 18:30 1:00 AM01:00
SINGAPORE 5:45 PM – 2:30 AM17:45 – 02:30 9:00 AM09:00

Summary: Why Trade Cocoa Futures?

Cocoa is a highly volatile and liquid commodity with a combination of increasing global demand and with supply sensitive to political and weather conditions. Many regulated CFD brokers like LCG offer retail traders the opportunity to trade Cocoa without the institutional capital requirements of a futures exchange.