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Crude Oil Futures Trading Basics

Crude Oil futures are standardized, exchange-traded contracts in which the contract buyer agrees to take delivery, from the seller, a specific quantity of crude oil (eg. 1000 barrels) at a predetermined price on a future delivery date.

Crude Oil Futures Exchanges

You can trade Crude Oil futures at New York Mercantile Exchange (NYMEX) and Tokyo Commodity Exchange (TOCOM).

NYMEX Light Sweet Crude Oil futures prices are quoted in dollars and cents per barrel and are traded in lot sizes of 1000 barrels (42000 gallons).

NYMEX Brent Crude Oil futures are traded in units of 1000 barrels (42000 gallons) and contract prices are quoted in dollars and cents per barrel.

TOCOM Crude Oil futures prices are quoted in yen per kiloliter and are traded in lot sizes of 50 kiloliters (13210 gallons).

Exchange & Product NameSymbolContract SizeInitial Margin
NYMEX Light Sweet Crude Oil Futures
(Price Quotes)
CL1000 barrels
(Full Contract Spec)
USD 9,113 (approx. 23%)
(Latest Margin Info)
NYMEX Brent Crude Oil Futures
(Price Quotes)
BZ1000 barrels
(Full Contract Spec)
USD 12,825 (approx. 29%)
(Latest Margin Info)
TOCOM Crude Oil Futures
(Price Quotes)
-50 kiloliters
(Full Contract Spec)
JPY 210,000 (approx. 17%)
(Latest Margin Info)

Crude Oil Futures Trading Basics

Consumers and producers of crude oil can manage crude oil price risk by purchasing and selling crude oil futures. Crude Oil producers can employ a short hedge to lock in a selling price for the crude oil they produce while businesses that require crude oil can utilize a long hedge to secure a purchase price for the commodity they need.

Crude Oil futures are also traded by speculators who assume the price risk that hedgers try to avoid in return for a chance to profit from favorable crude oil price movement. Speculators buy crude oil futures when they believe that crude oil prices will go up. Conversely, they will sell crude oil futures when they think that crude oil prices will fall.

Learn More About Crude Oil Futures & Options Trading

How to Start Trading Crude Oil Futures

To buy or sell crude oil futures, you need to open a trading account with a broker that handles futures trades. Most online brokerages out there only deal with stocks and stock options. Only a few such as TD Ameritrade lets you trade futures and futures options as well. TD Ameritrade also provide a virtual trading platform where beginners can try out futures and options trading in real market conditions without using real money.

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