March 3, 2022
Oil trading is the buying and selling of different types of oil and oil-linked assets with the aim of making a profit. As oil is a finite resource, its price can see massive fluctuations due to supply and demand changes. This volatility makes it extremely popular among traders.
You can use CFDs to trade on oils spot price, or the prices of oil futures or options contracts, without having to own any actual oil.
There are three ways you can trade oil:
Oil spot prices represent the cost of buying or selling oil immediately, or ‘on the spot’ – instead of at a set date in the future. While futures prices reflect how much the markets believe oil will be worth when the future expires, spot prices show how much it is worth right now.
Oil futures are contracts in which you agree to exchange an amount of oil at a set price on a set date. Theyre traded on exchanges and reflect the demand for different types of oil. Oil futures are a common method of buying and selling oil, and they enable you to trade rising and falling prices.
An oil option is similar to a futures contract but there‘s no obligation to trade if you don’t want to. They give you the right to buy or sell an amount of oil at a set price on a set expiry date, but you wouldnt be obliged to exercise your option.
OneProSpecial Analyst
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The foregoing is a personal opinion only and does not represent any opinion ofOneProGlobal, nor is there any guarantee of reliability, accuracy or originality in the foregoing.
Forex and CFD trading may pose a risk to your invested capital.
Before making an investment decision, investors should consider their own circumstances to assess the risks of investment products. If necessary, consult a professional investment advisor.
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