Trading crude oil futures can be a dynamic and strategic approach to diversifying your trading strategy. Crude oil is a major global commodity, with dynamic price movements influenced by a variety of geopolitical, economic, and supply and demand forces, making it a key market for traders all around the world. It’s no wonder it’s one of the top three volume-traded commodities.
With many key fundamental and economic data points to pull from, traders can use this information—along with price data and technical analysis—to guide their trading decisions. Combine this data with the global significance of crude oil and large trading volume, and you get crude oil futures: an exciting and engaging contract for traders of all levels.
Watch this video to learn about the crude oil futures market and how you can trade this contract to help diversify your trading.
Additional topics discussed in this free livestream:
Why crude oil futures are a great way to diversify your trading
Key statistics around crude oil futures
Key crude oil futures contract specifications
How Micro contracts can make crude oil trading accessible for traders of all sizes
How to use the CME’s Group Volatility Index (CVOL™) tool—which calculates a volatility index for key futures markets—in your futures trading
Advantages of Trading Crude Oil Futures Over Stock Indices
Trading crude oil futures offers a unique opportunity to diversify your futures trading plan beyond the commonly traded major market stock index futures. Unlike stock index futures —which are tied closely to corporate performance and economic indicators—crude oil futures are influenced by a variety of global factors including geopolitical events, changes in energy policies, and fluctuations in supply and demand.
This difference in market drivers can provide traders with non-correlated trading opportunities, potentially reducing your overall risk and increasing the robustness of your trading strategy. Learn more about trading futures vs. stocks.
Trade flexibly: Understanding crude oil contract specifications
When crude oil trading, it’s important to know the market you’re trading by examining and understanding the contract specifications. Many markets like crude oil are available to trade in both standard-sized and micro-sized contracts (e.g., Micro crude oil). Knowing the specific details of these contracts can help you place more accurate orders and manage your trading risk more effectively.
Contract specifications are unique for each futures market and are a crucial concept for anyone involved in trading crude oil futures. These specifications determine how a futures contract is traded, including its size, trading hours, delivery method, expiration date, and more. See the contract specifications for both the standard-sized (CL) and micro-sized (MCL) crude oil futures contracts toward the bottom of the crude oil contracts page.
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