Oil Futures Trading

There are several ways for market participants to invest in the oil markets, including futures trading, ETFs and direct investment. To build consistent profits in the crude oil and energy space, traders must focus on a number of key factors, including market fundamentals, such as supply and demand, and technical indicators gleaned from charts.More info :theinvestorscentre.co.uk

The most common way to trade oil is by buying a futures contract. The most popular types of oil futures are Brent Crude and West Texas Intermediate (WTI), traded on the Intercontinental Exchange and New York Mercantile Exchange respectively. In a futures contract, you agree to buy or sell an agreed amount of the commodity at a specified price on a specific date in the future. Most oil futures are not physically deliverable, and instead are settled by financial settlement at expiration.

Oil Futures vs. Crude Oil ETFs: Which is Right for You

This is because many end-users buy oil futures to lock in a price, taking a gamble on what the oil price will actually be in the future. Others buy the futures as a hedge against the risk of rising prices, and profits are made if their speculation was correct.

Crude oil is a highly sensitive market to a wide variety of news events, and prices can move rapidly at the slightest hint of market volatility. It’s also a market where ranges are common, and traders who understand the importance of support and resistance can often profit from those periods of inactivity.