2. Trading Oil
• 1 contract of oil controls a 1000 barrels of
oil, and if oil is 100 USD/ barrel then it has
the equivalent of 100K USD.
• Most investors would shy away from
trading this vehicle if it were not for the fact
that the broker gives a trader significant
leverage when buying this instrument on
margin which can be from 2-4k depending
on which broker one uses.
3. Trading Oil
Oil should be primarily used as a short term trading
vehicle as the risk can be significant if one holds the
trade overnight.
If one is a highly skilled technical analyst then they can
predict short term price movement over minutes to hours
using charting patterns.
4. Trading Oil
• Commodities trading in general provides multiple trading
opportunities during the day during its open outcry period
which is between 9-230pm eastern where there is a
significant increase in volume due to decreased margins.
• One should be well capitalized for this market as to
many investors try to trade to quickly.
5. Trading Oil
• One should practice on a virtual account first until one is
comfortable before moving to a live account.
• If one rushes by trading too big then failure is the only
outcome.
• Any new discipline should be approached with caution,
and only with consistent success at a smaller level
should a trader begin to trader a higher risk instrument.
6. Sean Seshadri
Please visit us on
www.luxinvestmentsintl.com
