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Gasoline Futures Trading Basics
Gasoline futures are standardized, exchange-traded contracts in which the contract buyer agrees to take delivery, from the seller, a specific quantity of gasoline (eg. 50 kiloliters) at a predetermined price on a future delivery date.
Gasoline Futures Exchanges
You can trade Gasoline futures at New York Mercantile Exchange (NYMEX) and Tokyo Commodity Exchange (TOCOM).
NYMEX Gasoline futures prices are quoted in dollars and cents per gallon and are traded in lot sizes of 42000 gallons (1000 barrels).
TOCOM Gasoline futures are traded in units of 50 kiloliters (13210 gallons) and contract prices are quoted in yen per kiloliter.
| Exchange & Product Name | Symbol | Contract Size | Initial Margin |
| NYMEX Gasoline Futures (Price Quotes) | RB | 42000 gallons (Full Contract Spec) | USD 9,450 (approx. 20%) (Latest Margin Info) |
| TOCOM Gasoline Futures (Price Quotes) | - | 50 kiloliters (Full Contract Spec) | JPY 210,000 (approx. 13%) (Latest Margin Info) |
Gasoline Futures Trading
Consumers and producers of gasoline can manage gasoline price risk by purchasing and selling gasoline futures. Gasoline producers can employ a short hedge to lock in a selling price for the gasoline they produce while businesses that require gasoline can utilize a long hedge to secure a purchase price for the commodity they need.
Gasoline 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 gasoline price movement. Speculators buy gasoline futures when they believe that gasoline prices will go up. Conversely, they will sell gasoline futures when they think that gasoline prices will fall.
Related Articles
- Buying Gasoline Futures to Profit from a Rise in Gasoline Prices
- Selling Gasoline Futures to Profit from a Fall in Gasoline Prices
- Gasoline Options Basics
- Gasoline Call Option Trading Basics
- Gasoline Put Option Trading Basics
- Hedging Against Rising Gasoline Prices with Gasoline Futures
- Hedging Against Falling Gasoline Prices with Gasoline Futures
How to Start Trading Gasoline Futures
To buy or sell gasoline 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 optionsXpress lets you trade futures and futures options as well. optionsXpress also provide a virtual trading platform where beginners can try out futures and options trading in real market conditions without using real money.
