What you are actually trading is not the barrel

Between you and a barrel of oil stand two contracts, and each one changes what you actually hold.

Layer one: the future

The exchange contract is the promise from lesson 1 - a grade, a place, a month. It has a settlement price, margin calls, an expiry date, and a delivery obligation at the end. Professionals trade this layer directly.

Layer two: your wrapper

A retail CFD or spread bet references that future but is a private contract with your broker. The quote is your broker's own - derived from the exchange price, with a spread around it, exactly as your index quote was. You cannot deliver into it, and it never expires on you; instead the broker rolls its reference from one contract month to the next and adjusts your position for the difference. What that roll costs, and how financing is charged, is module 3's business. This lesson only needs you to know the layer exists.

The chart is a splice

Here is the consequence nobody warns you about. The future your wrapper references expires every month or quarter, so the 'continuous' chart on your platform is a splice of many contracts joined end to end. December oil and January oil are different prices - so at each join, someone chose how to stitch the seam, and different platforms choose differently.

This is why your chart and a friend's chart of 'the same' oil market can show different levels, why a years-long commodity chart can mislead you about what a buy-and-hold would have returned, and why a support level from eight months ago may be an artefact of the splice rather than a price anyone traded. The month dimension - the third part of the promise - is hiding inside every commodity chart you will ever look at.

What to take from this

• Your quote is your broker's, at every moment. The exchange price is its ancestor, not its twin.
• Your position rolls; the future expires. The difference between those two facts is a recurring cost you will meet in module 3.
• Any long-term commodity chart is a constructed object. Ask how it was joined before you trust what it seems to show.