The Oil Trading
Oil has always played a crucial role in any portfolio of a trader. There are several ways to invest in Oil, for example by funding the exploration of oil, by financing through the ETF's and mutual funds. These investment vehicles depends to a large extent on the performance of oil, speculation, and supply and demand. This makes it a very risky business. Oil trade against the dollar, however, means that the trader does not own the underlying asset, but instead trade it about price movement. The trader, then, can benefit as much if the price of oil goes up or down and also can take advantage of volatile market movements. For these reasons, oil is a good option for speculation.
The oil trading twith Forex brokers and other companies, is carried out identically to currency trading. It is OTC trading (in Over The Counter markets), which means that transactions are directly between only two sides, the buyer and the seller. Theres is no any third party or side involved, as in an exchange market.
The acronym for the commodity oil is OIL. It is measured in barrels but are settled in cash (non-delivery trading), that means that the negociation is not carried out physically. The price of oil is set based on a currency like the U.S. dollar. For example, the price of oil in terms of the US Dollar has the following form:
- OIL/USD = 76.85 dollars for each oil barrel.
Like other commodities like gold or silver, oil is used as the basis for all operations with a variety of financial derivatives as futures contracts, financial options, CFD (Contracts For Difference) and others. This makes the oil a very versatile instrument for investing and speculating.
Oil Futures contracts
In a contract of Oil Future, the buyer agrees to pay and accept the delivery of the product and the seller acept to deliver the oil at the required place at the required time. These Futures contracts are celebrated in specialized markets and there are paid one day in advance according to the current market price. The minimum contract size is 1000 barrels. The major oil trading agreements are made on the major stock trading as NYMEX, CME, РТС LOE and other. Oil contracts are one of the most common among Futures contracts,
Oil contracts are most common among futures and are used for speculative purposes (benefit from changes in the price of oil) and for hedging purposes. If the contract is used for hedging, the investor wants to ensure a fixed price today for tomorrow's operation. The Oil Futures trading can be very profitable and risky at the same time, therefore investors should be careful with them.
List of Oil Trading Brokers
A ranked list of Forex brokers and others companies which provide all traders the opportunity to trade with oil and, sometimes, other types of goods. The price of oil is strongly connected with the currency prices. That's why the oil market often provides a good opportunity for forex traders to maximize profits usual.
Type of broker
Minimum Account Size
|Alpari||Forex broker||No minimum account deposit|
|Liquid Markets||Forex broker||$2000|
|Atlas Capital FX||Forex broker||$10|
|GCI Financial||Forex broker||$1000|
|IFC Markets||Forex broker||$1|
|AFM Forex||Forex broker||$100|
|Anyoption||Binary option broker||$100|
|BinarixTrading||Binary option broker||$100|
|OptionBit||Binary option broker||$100|
|Startoptions||Binary option broker||$100|
|Winoptions||Binary option broker||$100|
|EZTrader||Binary option broker||$100|