Oil futures trading app

Price action tends to build narrow trading ranges when crude oil reacts to mixed conditions, with sideways action often persisting for years at a time. Some of the largest U. Explore articles , videos , webcasts , and in-person events on a range of futures topics to make you a more informed trader.

Three ways of trading oil

The desire to foresee events in the future, or to forecast what is «likely» to happen, is one characteristic of human behaviour that dates back to the origin of mankind. At its core, the trading of a futures contract is no different than prognosticating on any subject; a hypothesis is formed and tested, and a result is observed. In its simplest form, a futures contract is an agreement between a buyer and seller to trade an underlying asset at an agreed upon price on a specified date. There are four basic components to a futures contract: the underlying asset, expiration date, pricing and leverage. The underlying asset of a futures contract provides the «hard value» to the transaction. Assets oil futures trading app in various types, ranging from traditional to exotic. Agricultural commodities, precious metals, foreign currencies, energy products and interest rates are the categories of traditional futures products.

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Crude oil is one of the better commodities on which to trade futures contracts. The market is incredibly active, and it is well known to traders around the world. Oil prices fluctuate on the faintest whisper of news regarding pricing, which makes it a favorite of swing and day traders looking for an edge. This volatile environment can provide some solid trading opportunities, whether your focus is on day trading futures or you are a longer-term trader. It may also provide great losses if you are on the wrong side of a price movement.

The desire to foresee events in the future, or to forecast what is «likely» to happen, is one characteristic of human behaviour that dates back to the origin of mankind. At its core, the trading of a futures contract is no different than prognosticating on any subject; a hypothesis is formed and tested, and a result is observed. In its simplest form, a futures contract is an agreement between a buyer and seller to trade an underlying asset at an agreed upon price on a specified date. There are four basic components to a futures contract: the underlying asset, expiration date, pricing and leverage.

The underlying asset of a futures contract provides the «hard value» to the transaction. Assets come in various types, ranging from traditional to exotic. Agricultural commodities, precious metals, foreign currencies, energy products and interest rates are the categories of traditional futures products. Exotic futures contracts such as region-specific snowfall, temperature indexes, hurricanes, and even box office receipts for a motion picture release are examples of unconventional contracts.

Each futures contract is given a code for identification. The code includes information regarding the underlying asset along with contract month and year. The period of time during which a futures contract can be actively traded varies depending on the contract’s specifications. Upon becoming available for trade, each contract is supplied with an «expiration date.

On expiration day, cash accounts are squared using the final settlement price as the basis for valuation, and buyers of the actual physical asset if there is one present may begin arrangements to take delivery. It is important to remember that a current futures contract addresses the potential value of an underlying asset at a future date. For instance, a contract offered on a monthly basis, such as crude oil, commonly has a front month contract one month removed from expiration; the front month contract for active trading in May is dated June, for June is dated July.

However, it is possible that the front month contract is several months away. The price of a futures contract is the current amount of money needed for an individual to buy or sell the underlying asset ahead of expiration day. Similar to trading a currency pairing on the forex, a futures contract’s price is based upon the value of a specified amount of the underlying asset. For instance, one contract of WTI Crude Oil is priced according to the total value of 1, barrels of oil.

The current price of the futures contract is based upon its projected value at expiration. One of the key principles of futures trading is the employment of leverage upon the marketplace. Futures contracts can be traded in multiple quantities, commonly referred to as «lots. Margin requirements are set forth by the trader’s brokerage firm in order to govern the maximum number of lots traded at one time. There are two types of margin requirements: intraday and overnight. Margin requirements vary greatly depending on position size, brokerage firm, client account size and futures product being traded.

The trading of futures contracts in the modern electronic marketplace is a fast-paced endeavour, with an abundance of liquidity and volatility. Regulatory bodies, exchanges, brokerage firms and individual traders all play separate roles in the trading of futures. The characteristics of a futures contract afford the individual an opportunity to limit risk through proper investment, or to capitalise on a prediction of coming events.

Two types of individuals participate in the buying and selling of futures contracts:. No matter which type of market participant one is, the bottom line of futures trading is profit and loss. Where there is uncertainty, there is opportunity; and where there is opportunity, there are always individuals looking to prosper. Numerous futures exchanges exist around the globe providing speculators and hedgers alike the opportunity to actively trade futures contracts based on a number of asset classes.

If one is interested in conducting trading operations involving futures, then one of the following exchanges is likely facilitating the trade.

For the year endlisted below are the top-five futures exchanges in the world, according to total volume of contracts traded [4] :. Each exchange has a specific country in which it is based, but due to the global nature of futures trading, most operate separate branch offices around the world.

Although futures trading was once exclusive to the open outcry trading system, modern trading practices have evolved into a largely digital marketplace. Regulation of a futures exchange exists as «self-regulation» coupled with oversight from a jurisdictional authority. The process of placing a trade is standard no matter which exchange or type of futures contract is involved in the transaction.

Currently, the active trading of futures is a digital, exchange-based endeavour with trading operations being conducted by the trader online via internet connection with the exchange. Upon the order’s placement by the trader, several actions are carried out:. As price moves for and against entry, a running tally of profit or loss is kept, and the trader’s account is instantly debited or credited the. As the trader closes the position, an offsetting order is processed, and a profit or loss is realised.

Trading futures is not like investing in real estate, precious metals or a retirement account. In futures, asset values fluctuate rapidly, nearly 24 hours a day, five and a half days a week. To successfully navigate the sometimes-turbulent waters any futures market can bring, one must define and mitigate as many elements of risk as possible.

Risk management must always be in the futures trader’s mind. The use of proper money management techniques, stop-loss orders and adequate trading equipment are all necessities when trading futures. It is imperative that proper risk management techniques are employed to ensure the relative safety of an individual’s investment capital. The active trading of a futures contract provides the individual many unique financial opportunities, while also presenting the potential for financial hazard.

Hedging practices and short-term speculative endeavours can be wealth preserving and profitable ventures. However, the volatility and financial leverage present in the modern futures marketplace is capable of producing severe drawdowns of capital in relatively short periods of time.

As in any trading activity, one must possess an understanding of the basic tenets governing money management and the mechanics of trade applicable. If approached from an educated and financially responsible standpoint, an excursion into the arena of futures trading can become a rewarding experience. Any opinions, news, research, analyses, prices, other information, or links to third-party sites are provided as general market commentary and do not constitute investment advice.

FXCM will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an «as-is» basis, as general market commentary and do not constitute investment advice.

The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination.

Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of oil futures trading app communication.

The employees of FXCM commit to acting in the clients’ best interests and represent their views without misleading, deceiving, or otherwise impairing the clients’ ability to make informed investment decisions. For more information about the FXCM’s internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms’ Managing Conflicts Policy.

Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed. Demo Account: Although demo accounts attempt to replicate real markets, they operate in a simulated market environment. As such, there oil futures trading app key differences that distinguish them from real accounts; including but not limited to, the lack of dependence on real-time market liquidity, a delay in pricing, and the availability of some products which may not be tradable on live accounts.

There may be instances where margin requirements differ from those of live accounts as updates to demo accounts may not always coincide with those of real accounts. Please note our special trading hours over the festive period. What Is A Futures Contract? Underlying Asset The underlying asset of a futures contract provides the «hard value» to the transaction.

Expiration Date The period of time during which a futures contract can be actively traded varies depending on the contract’s specifications. Pricing The price of a futures contract is the current amount of money needed for an individual to buy or sell the underlying asset ahead of expiration day. Leverage Leverage is a double-edged sword as it can significantly increase profits as well as losses.

An intraday margin requirement is the amount of capital needed to trade a futures contract given that the position will be closed at session’s end. The overnight margin is the amount of capital reserves to be present in the trading account in order to hold a position through the session close and into next session’s open. Market Participants The trading of futures contracts in the modern electronic marketplace is a fast-paced endeavour, with an abundance of liquidity and volatility.

Classifications Of Futures Traders The characteristics of a futures contract afford the individual an opportunity to limit risk through proper investment, or to capitalise on a prediction of coming events. Two types of individuals participate in the buying and selling of futures contracts: Hedgers : A hedger participates in a futures market with the goal of wealth preservation, through eliminating unknown risk.

Farmers, bankers and producers are examples of hedgers. Speculators : A speculator looks to gain financial reward from capitalising on pricing volatility. Investors and traders are examples of speculators. Global Futures Exchanges And Regulatory Bodies Numerous futures exchanges exist around the globe providing speculators and hedgers alike the opportunity to actively trade futures contracts based on a number of asset classes. Trade Execution: Top To Bottom The process of placing a trade is standard no matter which exchange or type of futures contract is involved in the transaction.

Upon the order’s placement by the trader, several actions are carried out: The buy order for one CLK6 is sent from the trader’s platform to the brokerage firm. Upon arrival at the brokerage firm, the order undergoes liquidity tests to ensure that margin requirements are met. If so, the brokerage firm relays the order to the exchange. The exchange receives the order and acts as a clearinghouse. The order is accepted, filled and a confirmation including the details of the transaction is returned to the brokerage firm.

The brokerage firm forwards confirmation to the trader. Potential Hazards Trading futures is not like investing in real estate, precious metals or a retirement account. Key risk factors present in the trading of futures are as follows: Volatility: Depending on the product and contract, periods of extreme pricing fluctuation are likely to occur every trading session. Unexpected news, geopolitical issues and economic data releases are a few occurrences that can send a futures market into chaos.

Leverage : By nature, a futures contract is a leveraged financial product. The ability for an individual to engage in a trade with disproportionate risk is easy. A simple click of the mouse and an increase in the number of «lots» being traded can boost exposure quickly and dramatically. Slippage: The digital marketplace has increased the amount of volume in the world’s futures markets exponentially.

Often, large moves in price occur at near light speeds. Without adequate equipment and proper trade strategy, entering and exiting the market can be costly. At no fault to the trader, an order price may be filled with a vastly different price than desired. Large losses can be sustained when participating in an irrational market.

Summary The active trading of a futures contract provides the individual many unique financial opportunities, while also presenting the potential for financial hazard. Disclosure Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an «as-is» basis, as general market commentary and do not constitute investment advice.

Market Participants

With our elite trading platform thinkorswim appp, and its mobile companion the thinkorswim Mobile Appyou can trade futures where and how you like with seamless integration between your devices. It peaked late oil futures trading app the decade and began a tortuous decline, dropping into the teens ahead of the new millennium. Whether you’re new to futures or a seasoned pro, we offer the tools and resources you need to feel confident trading futures. Bearish crude oil positions require buying these crosses while bullish positions require selling them short. The amount you need in your account to day trade a crude oil futures contract depends on your futures broker.