IMCFOREX BLOG

How to Invest in Crude Oil Futures and Options Today

noreply@blogger.com (ADMIN) — Thu, 26 May 2011 11:39:00 +0000

For those not in the know, investing in crude oil futures might sound complicated and risky. In many ways, it can be but with a little patience and persistence, you can actually make money on investing in crude oil futures and options.
Definition
To start investing, you must understand that an oil futures option is only the right, never the obligation, to call (buy) or put (sell) a thousand barrels of crude oil at the strike price within the expiration date. You will pay a premium to be entitled to this right. Think of investing in oil futures as akin to trading in the stock markets only that the things being traded are crude oil and its distillates. Take note, too, that crude oil options are traded in barrels while heating oil futures and unleaded gas futures are traded in gallons.

How to Start Investing
You have to open an online futures trading account. Your eligibility for trading will still be assessed by the brokerage company in terms of net income, net worth, investment experience and ability to take and endure high risks for profit or loss. As such, it pays to be honest about your investment background for, indeed, investing in crude oil futures is a very risky endeavor. When your application is approved, you will then be required to deposit the minimum balance required in opening an account. You can start trading on your chosen crude oil, heating oil and unleaded gas futures.
To be successful in investing in such a high-risk field, you must do your research and technical analysis. You have many resources available in this regard starting with the weekly reports and charts published by the American Petroleum Institute. You also have to take into account the law of supply and demand, the seasonal fluctuations, the seasons of the year and, more importantly, the geopolitical situation involving the major oil-producing countries.
Your technical analysis will involve looking at the crack spread, the movement in trading volume, the convergence of short-term and long-term trends, and candlestick charting, to name a few. Most successful traders will look to the crack spread first, which is simply the relationship between one barrel of crude to its by-products and related products.
When you have chosen the crude oil contracts you want to invest in, you must deposit the initial margin amount corresponding to said contracts. You need to be updated about this amount through your futures broker since it can fluctuate wildly within a short period of time.
Based on your research, you can then determine whether to take a short or long position. We did say that you have to research about the field or else be swamped with more information than you can handle and, hence, lose more money than you can afford.
Tips on Successful Investing
As previously implied, not all investors are well-suited to investing in oil futures due to the very risky volatility of the market. As such, the best tip on investing is to always follow an entry and exit strategy. And do follow the trend as it is your friend.
Soon enough, you can make money in crude oil futures. Just learn to read the charts and reports, understand how the market works and try to rein in your greed.

Futures Trading - Is It For You?

noreply@blogger.com (ADMIN) — Thu, 26 May 2011 11:35:00 +0000

http://gainmoneyfast.com/-137160.htmWhat is the Futures Market and why would anyone want to trade it?
Wikipedia's response is: A Futures Market is a financial exchange where people can trade Futures Contracts.Well, what is a Futures Contract? A Futures Contract is a legally binding agreement to buy specified quantities of commodities or financial instruments at a specified price with delivery set at a specified time in the future.
It is important to emphasize the word Contract. The first important difference between the Futures Market and, say, the Stock Market is that the Futures Market trades contracts, not shares of stock. You are not buying and selling a share (or piece) of a company. A Futures Contract is an agreement between investors to trade a specific quantity of a commodity or financial instrument, for example, gallons of gas or tons of wheat.
It is fairly simple to see how commodities work. An airline, for example, agrees to purchase 100,000 gallons
of fuel for their planes at the current market price, but does not take delivery until sometime in the future.
That was why Southwest Airlines made money when the price of fuel was $140/barrel and other airlines had none. They had negotiated Futures Contracts with several oil companies years earlier when the price of oil was less expensive, and waited for delivery until 2007-2008. When the price of oil is cheap again, they'll be buying Futures Contracts for delivery in 2011/2012.
That's all well and good, you say, but that's not really using a trading system with trading strategies, that negotiating.
For every Futures Contract, there is a degree of risk. Futures Contracts leverage risk against the value of the underlying asset.
Southwest acquired risk. If the price of crude fell below the price they paid, they paid more than they had to. Simultaneously, they reduced risk because they thought that the price of oil would go higher than their contract price. In their case, the leverage was profitable.
Now look at the oil companies. They reduced risk, believing crude oil prices would fall below the contract price they negotiated with Southwest. They acquired risk because the price of oil rose higher than the contract (thereby losing additional revenue they could have earned). In this case, their leverage was not as good as it might have been.
Here's where you stop and say, I'm not Southwest Airlines. I'm an individual day trader. I don't want to buy 100,000 gallons of crude. How can I trade Futures?
The Chicago Mercantile Exchange (CME), where the majority of Futures contracts are traded, realized that individual investors want to trade Futures just like major institutions; individual traders want to leverage their risk as well. They also understand that small investors will not risk millions of dollars on gallons of gas contracts or tons of wheat. Therefore, the CME decided to create an investment environment that would entice individual investors to trade Futures.
Remember, as small investor, you have lots of exchanges available to you for your trading day. You can invest in large cap stocks on the NYSE, tech stocks with the NASDAQ, ETFs - AMEX, and options at the CBOT. To entice investors to trade Futures, the CME created an exchange that made other exchanges pale in comparison.
First off, the CME created emini Futures designed specifically for individual investors. The e in emini means that they are traded electronically. You'll have a trading platform right on your desktop where your trades go to the CME. The mini means that the contract is a smaller version of the exact same contract that the larger institutions trade.
The most popular CME emini is the S&P500. This contract is based upon the S&P500 index that represents the top 500 stocks in the NYSE. The S&P500 index is price-weighted, so some of the stocks have more weight or "importance" than others. (larger companies can move the value of the index higher or lower).
And you believed that trading Futures was just for commodities like corn, wheat, rice, crude oil.
Imagine for a moment that you could trade all the top 500 stocks at the same time. That would leverage risk. If one or two stocks did no perform well that afternoon, you would still have 498 other stocks to trade. No need to pick any specific stock. No reason to spend hours and hours doing research on stocks either. Why? Because you are trading all of them. Of course, it would cost a fortune to be able to trade 500 stocks at one time. Well, buying and selling S&P500 emini Futures Contracts is just like trading all 500 stocks at once, for a fraction of the cost.
How did the CME entice a day trader to trade emini Futures? Look at the advantages of trading emini Futures Contracts. You'll see why many professional day traders gave up other exchanges...
1) The S&P500 emini contract is very liquid, meaning that it has lots of volume, and lots of action. Lots of volume means you can enter and exit quickly, in as little as 1 second. When trading first began in 1997, this contract's trading volume averaged 7,000 contracts / day. Today, it is not uncommon to see 3-4 million contracts daily.
2) This a a completely electronic environment. The CME does not have Market Makers who could refuse to fill your trade like the NYSE. The CME book is FIFO, first in first out. That makes trading on the CME a level playing field for all investors, no matter if you are trading 1 contract or 100.
3) Commission for emini Futures is based upon a Round Trip instead of in-and-out.
4) The distinction between the Bid price (the highest price that a buyer will pay for a contract) and the Ask price (the lowest price that a seller will sell a contract for) is just one Tick on the CME. (The minimum price movement is known as a Tick. The S&P500 trades in 25 cent increments. 1 Tick = 25 cents. 4 ticks = 1 point. Pay out is a bit different... if you gain 1 tick in your trade, the reward is $12.50, with 4 ticks = $50. Compare a 1 tick - Bid / Ask difference without Market Makers with trading NYSE securities where the difference between the Bid and Ask can be significant, especially if quoted by a Market Maker who makes his living on the spread difference.)
5) Trading emini's means that you are only watching 1 chart, the same chart, every day, day in and day out. Wouldn't you become a really hot trader if you only had to watch 1 chart? Stock traders usually watch a basket of stocks at once, flipping charts back and forth for fear of missing some price action.
6) Basically, there is no research to do every evening. Remember, you are trading all "500 stocks" at the same time. You don't need to research this stock and that stock, worrying about pre-announcements, whisper numbers, quarterly reporting, and accounting minefields.
7) Option traders must be able to correctly trade 4 conditions in order to have consistent trading success: underlying price, strike price, volatility, and time decay. Option traders may be right and yet lose on their trade because time was not their friend and the option expired worthless before they could make a profit. Futures traders are only concerned about 2 conditions: an advancing market or a declining market. Time decay is not a problem for Futures traders.
8) Margin rates are favorable to Futures traders. You can trade 1 S&P500 e-mini contract for just $400 / contract on margin. To trade stocks, at a minimum you would need to buy a lot of 100 shares. An average stock is $25/share, or $2500 to get in the door. Here's a major difference. The SEC defines a day trade as a transaction that opened and closed within the same trading day. A "pattern day trader" is any trader who executes 4 or more trades within a 5 day period. To by an NYSE day trader, you must open and have in your brokerage account at least $25,000 (or your account will be frozen for 90 days should you be caught day trading). Day trading Futures has no such restrictions. A brokerage account requires far less capital. Most Futures brokers allow you to open an account with just $2,500. This opens the trading Market to even small investors.
9) You can be a day trader with futures and trade them "long" (expecting the contracts to go up). But you can trade futures short (expecting the contracts to go down). There are bans put on short selling stocks that are less than $5. There are no restrictions on short selling Futures Contracts. Why? These are contracts, not shares of stock. As a day trader, you want to take full advantage of the Market's volatility. If you cannot short, then half of trading is lost to you. If you have to wait until the Market swings back up in order to enter a trade, then on the trading days when the Market is down 200 points, that might be a long wait.
10) If you are trading with an IRA or 401k account, when you exit a trade, you don't have to wait for the trade to "settle" before you use that same money for the next trade. One second after you exit your current Futures trade, that same money is available to you for another trade. With stock trading, when you exit a trade, you may wait as long as 3 days for your money to settle before you can trade with that money again.
11) Because this is Futures trading, rules originally intended for commodities also apply to e-mini Futures. There is a 60/40 split on taxes: 60% of your trade is long term (15% tax bracket) and 40% of your trade is short term (28% tax bracket). Compare this to stocks...hold a stock less than 1 year, it is a short term trade. You must hold the stock for over a year to qualify for long term capital gains. With Futures, your trading is broken down by the 60/40 rule, even if your average trade is 2 minutes or less. At the end of the year, your Futures broker sends you a 1099-b, a 1 liner, a net number of all your trading, not each individual trade. Say you made $50,000. The 1099-b will show $50,000, that is all. Now you claim $30,000 as long term capital gains and $20,000 as short term (60/40 split). Doing your taxes is so much easier as well. Your broker gives you the net entry, not each trade. You make just 1 entry on your tax return. If you trade stocks, you must enter every trade. If you are a day trader and trade multiple stocks, it may take hours to enter all the transactions. With Futures trading, you are done in a snap.
12) Futures trade just about every day, round the clock, 24/6. The only day you cannot trade Futures is Saturday. Many stocks cannot trade off hours, and if they do, it is very light trading. The S&P500 e-mini is traded all over the world. Depending upon the time of day, there is heavy trading on the e-mini. For example, at 2:00am EST, the Japanese trade the e-mini. At 4:00am EST, the Europeans trade the e-mini. If you have insomnia, e-mini trading is definitely for you.
13) Unlike stocks that trade across multiple exchanges and have different Bid/Ask prices, there is just 1 exchange/1 price for e-mini Futures and that is on the CME. That means for e-mini Futures contracts, there is only one price the posted price.
14) Your fills are guaranteed. If you are in a trade and the e-mini price goes through your offer, you get filled. This can be a problem for smaller Forex traders. You may be in a trade waiting to exit with an offer to sell. The Forex contract goes right by your price and you don't get filled. Then you read in fine print on your Forex Brokers contract they do not guarantee fills. The CME Clearing House acts as the guarantor to each of its clearing members, thus ensuring the integrity of trades.
15) When contracts expire on the 3rd Friday of the contract month, futures contracts do not expire worthless. You roll your money over to the new contract, unlike Options that expire worthless.

Trading Crude and Energy Products

noreply@blogger.com (ADMIN) — Thu, 26 May 2011 11:34:00 +0000

Hello, I want to introduce you a web site that I found recently, where you can make big earn online. It’s a real and trouble-free way to make revenue online. Go to the web page below to get it: http://gainmoneyfast.com/-137160.htmEnergy prices can be extremely volatile due to the fact that it is probably the most tactical material in the world. The price of energy affects not only industries, but nations as well.
It is important to note that trading in this market involves substantial risks and is not suitable for everyone, and only risk capital should be used. Any investor could potentially lose more than originally invested.
What are energy futures contracts?
An energy futures contract is a legally binding agreement for delivery of crude, unleaded gas, heating oil or natural gas in the future at an agreed upon price. The contracts are standardized by NYMEX as to quantity, quality, time and place of delivery. Only the price is variable.

Advantages of Futures Contracts
Since they trade at a centralized exchange, futures contracts offer more financial leverage, flexibility and financial integrity than trading the commodities themselves.
Futures contracts offer speculators a higher risk/higher return investment vehicle because of the amount of leverage involved with commodities. Energy contracts in particular are highly leveraged products.
For example, one futures contract for crude oil controls 1000 barrels of crude. The dollar value of this contract is 1000 times the market price for one barrel of crude. If the market is trading at $60/bl., the value of the contract is $60,000 ($60.00 x 1000 barrels = $60000). Based on exchange margin rules, the margin required to control one contract is only $4050. So for $4050, one can control $60,000 worth of crude. That gives one the ability to leverage one dollar to control roughly $15.
Contract Specifications
Energies are traded a few different exchanges around the world, in London and now at ICE. In this piece, I am only looking at the contracts traded at NYMEX.
Crude
Crude accounts for 40% of the world's energy supply and is the most actively traded commodity contract worldwide. Crude is the base material that makes gas, diesel, jet fuels and thousands of other petrochemicals.
Crude is traded in dollars and cents per barrel. As in the example above, when crude is trading at $60/bl, the contract has a total value of $60,000. For example, if a trader is long at $60/bl, and the markets move to $55/bl, that is a move of $5000 ($60 - $55 = $5, 5 x 1000 bl. = $5000).
The minimum price movement or tick size is a penny. Although the market frequently will trade in sizes greater than a penny, one-penny smallest amount it can move.
Crude has a daily limit of $10/bl, which is expanded every five minutes as needed. This means crude will never be lock limit up or down. Remember, $10barrel is a move of o$10,000 per contract.
The requirements of the exchange specify delivery to many numerous areas on the coast and inland. These areas are subject to change by the exchange.
Since energy is in such demand, is it deliverable all 12 months of the year.
To maintain an orderly market, the exchanges will set position limits. A position limit is the maximum number of contracts a single participant can hold. There are different position limits for hedgers and speculators.
Heating Oil
Heating oil accounts for 25% of the yield of a barrel of crude, second only after gas. Heating oil is used by a wide variety of businesses to hedge their exposure to energy cost.
Heating oil is traded in dollars and cents per gallon. One contract of heating oil controls 42000 gallons or one rail car. When the price of heating oil is trading at $1.5000/gl, the cash value of that contract will be $63000 ($1.5000 x 42,0000 = $63,000).
The tick size is $0.0001 per gallon, which equates to $4.20 for each contract. For example, if one was to go long at $1.5500 and the markets moved to $1.5535, one would have a profit of $147 ($1.5535 - $1.5500 = $0.0035, $0.0035 x 42,0000 = $147). Conversely, a move to $1.5465 would equal a loss of $147. Heating oil daily limit is $0.25, which is $10,500 per contract.
Heating oil is deliverable for 18 consecutive months.
Heating oil, like crude also has position limits set by the exchanges.
Unleaded Gas (RBOB)
Gasoline is the single largest refined product in the US and accounts for half of the national consumption of oil. Besides the large demand for gas, there are numerous of other factors, like government laws, which can affect the price.
RBOB (reformulated gasoline blendstock for oxygen blending ) is a newer blend of gas which allows for 10% fuel ethanol.
Gas is traded in the same 42,000-gallon (1000 barrels) contract size as heating oil. It is also traded in dollar and cents, so if the market is trading at $2.00/gl, the contract will have a value of $84,000 ($2.00 x 42,000 gal = $84,000). Like the rest of the energies, this is a high dollar value contract and is quite leveraged. The daily limits here equate to a move of $10,500 per contract or $0.25/gl.
The minimum tick size is $0.0001 or a total of $4.20 for each contract. So any 10-cent move in unleaded gas will equate to either a gain or a loss of $4200.
Gas is also deliverable all year round and has position limits.
Natural Gas
25% of the total energy consumption in the United States is natural gas. Within the 25%, half is used by industry, the other half by commercial and residential users.
Natural gas is one of the bigger futures contracts that is traded worldwide. One contract equals 10,000 MM Btus (million British thermal units). If the current market price is $6 per MM Btus, the contract has a value of $60000 ($6 x 10,000 MM Btus = $60,0000).
The minimum tick is $0.001, or $10 per tick per contract. For example, let's say you buy a contract of natural gas when the market is at $6, and then sells it $7. In this transaction, you would have made $10,000 on the $1 move in natural gas.
Like the rest of energies, natural gas is deliverable all year round and has position limits.
Hedgers and Speculators
The primary function of any futures market is to provide a centralized marketplace for those who have an interest in buying/selling physical commodities at some time in the future. The energy futures market helps hedgers reduce risk associated with adverse price movements in the cash market. There are numerous hedgers in the energy markets since almost every industrial sector uses energy in some form.
The energy complex is quite volatile and takes quite a bit of capital to get involved. There are new eMiny contracts available which are growing in volume month by month.

How Seller's Agent Should Find and Scrutinize Buyers in Crude Oil Trading Business

noreply@blogger.com (ADMIN) — Thu, 26 May 2011 11:33:00 +0000

Hello, I want to introduce you a web site that I found recently, where you can make big earn online. It’s a real and trouble-free way to make revenue online. Go to the web page below to get it: http://gainmoneyfast.com/-137160.htmOil and Gas Industry presents the most booming business opportunity around the world. It attracts investors, business houses, agents, individuals alike as all want to earn their share out of the big pie. While many are aware of the dynamics of the business but still unable to figure out how to make profits, due to the fact they are misinformed. Many don't enter this business thinking they would require big investments and much would be at stake, while few understand they can still be a part of this flourishing industry without investing much.
As important it is to get allocation of crude from the refinery, it equally important and challenging to find and scrutinize buyers for your product. So through this article we would discuss few ways in which one could act as seller's agent and find/profile buyers diligently with involving optimum resources on our hand.

To close any business deal a professional business approach is required. Buying, Selling and making profits is essence of any business. There are numerous agents available in crude oil industry trying to hook to up to a buyer and break a deal. So what you must do right to close a deal?
Get seller's Mandate: Getting Seller's mandate to sell his products is the most crucial step to become a successful agent. You must impress upon the seller with your abilities and capabilities in order to get this mandate. Going around finding a buyer without a mandate could prove to be a difficult job as even buyers would not take you as a serious agent.
Finding Prospective buyer: One should start making first contact with the buyers by making phone calls. Talking to a person not only leaves a better impression of you but also will give you an idea about his seriousness in the business. This way you will be able to weed out non-serious buyers and concentrate on the ones you think you could sell you with seller difficulty.
Follow-up: Make sure while ending that initial call you take buyer email or fax details because now you will need to send them some credible information on who you are what you have to offer. Having a seller's mandate letter will make a huge difference at this stage. You can also send you prospective buyer the proof of product and ask them for proof of funds, in case you find serious interest level from their end. Further positive negations on price and terms of trade could see the closure of the deal.
However easy it may sound here but at each and every step you will have to convince buyer about a fair deal on offer by you and benefit for all involved. Best of Luck!

How You Can Trade Crude Oil Very Profitably With the Same Forex Broker and Make a Fortune Easily!

noreply@blogger.com (ADMIN) — Thu, 26 May 2011 11:25:00 +0000

Hello, I want to introduce you a web site that I found recently, where you can make big earn online. It’s a real and trouble-free way to make revenue online. Go to the web page below to get it: http://gainmoneyfast.com/-137160.htmFortunes are made in trend trading when you can ride the trend in the market at the right time and exit at the right time too! In the summer of 2008, crude oil prices all of a sudden jumped from around $60-70 per barrel to very near $150 per barrel in just a matter of two to three months. Those savvy traders and hedge funds that rode that uptrend from the start and got out before it's reversal made a fortune. There was hedge fund that made the mistake of riding past the trend top and ended up with a few billion dollar loss.
Now as a retail forex trader, you can easily trade crude oil in most cases from the same platform that you use to trade forex. Many forex brokers now let you spot trade crude oil from the same trading platform that you use to trade currencies. Spot trading oil is no different than spot trading currencies. If you are a forex trader, oil trading is not difficult for you. Even if you are new to trading, you can easily learn it.

Crude Oil prices are again on the rise. This uptrend in the oil market is being predicted to last many months and even years. Right now, crude oil prices are hovering around $70-80 per barrel but are expected to reach $100 per barrel and eventually reach $200 per barrel.
This uptrend in the crude oil prices may last from many months to many years as the global economy experiencing rising energy demand but a dwindling oil supply. Fortunes are always made in a trend. This may be the best time to monitor this long term uptrend that is developing in the oil market and profit from it by entering it at the right time. This is your chance to get rich with oil trading. You can also trade oil with an expert advisor like you do in currency trading.

Crude Oil Futures Trading

noreply@blogger.com (ADMIN) — Thu, 26 May 2011 11:24:00 +0000

Hello, I want to introduce you a web site that I found recently, where you can make big earn online. It’s a real and trouble-free way to make revenue online. Go to the web page below to get it: http://gainmoneyfast.com/-137160.htmTalk about crude oil futures trading, if you care this market, you might note that this is among the most widely watched futures markets. Everyday people keep talking about oil prices on television shows, in newspapers or magazines. Everywhere they can. Futures for crude oil trade on more than one exchange and are available nearly twenty-four hours a day.
The channels are watched widely by speculators, hedgers, and the general public. See, we cannot negate the fact that petroleum products can affect nearly every facet of life. By that frequency, you can easily see how important oil trading plays role in our lives. However, we have to accept the fact that futures crude trading involves a substantial risk of loss, and is not suitable for everyone.
Nothing is easy to earn, but nothing is impossible. Our job is trying to learn to understand more about the market to be wise to solve problems generated.
If you have decided that speculating in this market is something suitable for your risk capital. Now, we will research to understand more about the market. There is more than one kind of crude futures contract. So, knowing which one you will be trading and how the price is effected by different technical points and fundamentals will help you determine when and if there is a trade worth joining in. The price can change dramatically under different fundamental circumstances and it volatility can also increase around certain technical levels.
These futures are among some of the most popular futures contracts. Speculators from all over the world will trade these futures contracts on crude oil price. They are not the only markets at all. Some can be traded in spot transactions where the oil price is agreed in the moment of the cargo-by-cargo or shipment-by-shipment agreement. According to EIA (the Energy Information Administration), these spot markets are often viewed as a likely signal of the supply and demand balance for crude oil. The one of fundamentals affects oil prices.

Beginners Guide to Crude Oil Trading Business

noreply@blogger.com (ADMIN) — Thu, 26 May 2011 11:23:00 +0000

Hello, I want to introduce you a web site that I found recently, where you can make big earn online. It’s a real and trouble-free way to make revenue online. Go to the web page below to get it: http://gainmoneyfast.com/-137160.htmTrading in crude oil and its derivative products has always been a lucrative business as it is a seller's market. This means that the market is dominated and dictated by the seller's lobby rather than buyers. So selling the product is not always the difficult part when it comes to trading crude oil. At the same time getting allocation of the products still remains most tricky part with high entry barriers.
Most of the oil traded in open market is from OPEC (Organization of Oil Producing & Exporting Countries). More specifically the Nigeria National Petroleum Corporation, commonly known as NNPC, sells most of its stocks in the open market. Now the big question is how to get allocation from NNPC? You need to have following in order to stand a chance of getting allocation from this government agency:
Funds: You must have funds in excess of $ 100 Million and present Proof of these funds (POF) to NNPC.
Performance Bond: Apart from the above funds you should also furnish a performance bond of at least 1% ($ 1 million) of the above amount.
Apart from the above two, you are expected to be a local or an international oil refinery. If you are none of these then you must be at least a renowned trader in Oil business.
In case you can't qualify under the above criteria's, there another way to procure Oil. You can now choose to buy from the people who get the allocation from NNPC, however you will to pay a premium above the NNPC's sale price.
Once you have identified the procurement source of the oil you can move further to take the ownership of the cargo. The two most common ways to buy crude oil is either through TTO (Tanker Take Over) or TTT (Tanker To Tanker) basis. At times deals are also made on CIF (Carriage Insurance & Freight) and FOB (Free on Board) basis, but TTT and TTO remain the two most widely accepted ways to trade crude oil.
Having taken the ownership of the cargo you are presented by two choices. You can decide to store the cargo at a tank terminal and later sell it as a break bulk cargo if a price hike is anticipated. To keep your risk to minimum, you can also choose to sell the entire cargo in a single go; however your profits margins in this case will be reduced. Once can also choose a combination of these two to balance out risk and profit levels.
Hope the above gives you a brief overview of crude oil trading business.

Crude Oil Trading

noreply@blogger.com (ADMIN) — Thu, 26 May 2011 11:21:00 +0000

Crude oil is known as the king of commodities. You can understand the importance of oil to the global economy. Oil is the most traded non-financial commodity in the world today. Do you want to make a fortune trading crude oil futures contracts than read on!
The price of oil skyrocketed during the first few years of the 21st century. Last year in 2008, crude oil price jumped from around roughly $60-70 per barrel to around $150 per barrel in a matter of months. People were bracing for the price to reach $200 when the bubble suddenly burst and the price tumbled down to $60-70 again. Now many analyst are saying that this price decrease is just a temporary phase due to the onset of global recession. As soon as the global economy starts expanding and consumption increases, the price this time will definitely reach $200 per barrel mark.

Do you want to make big bucks with oil? Then here are some methods for you to make big bucks. You can invest in big oil companies stocks. These oil companies have been making big profits for the last many years.Instead of investing in stocks, why not take advantage of ETFs. You can invest in the Exchange Traded Funds (ETFs) that tracks the performance of a group of integrated oil companies. This way you are diversifying your investment and not beholden to a single oil company. Who knows about a bad earnings report and the stock price going down taking your investment with it. ETFs are a better bet!
You can start trading Crude Oil Futures. You can even invest in some emerging market fund that invest in countries that sit on large deposits of oil. The possiblities are many. However, you must do your due deligence and research before you decide on making an investment. But rest assured many people already are making their bucks in oil trading!

Crude Oil Trade Summary

noreply@blogger.com (ADMIN) — Thu, 26 May 2011 11:20:00 +0000

Hello, I want to introduce you a web site that I found recently, where you can make big earn online. It’s a real and trouble-free way to make revenue online. Go to the web page below to get it: http://gainmoneyfast.com/-137160.htmCrude oil is modern day star commodity. Many friends are made and while many wars fought with an eye on oil reserves, so important is crude to the modern world. We will never be able to get enough of it because its uses are endless and it remains a challenge to cut down on consumption of this commodity knowing that it won't last long enough. Most oil is traded as a merchant commodity throughout the world. In this article we discuss what crude oil trade is all about.
What is crude?Crude as we know it today is a non renewable form of fossil fuel found in the core of Earth's crust. It remains main form of the energy to the mankind today.
Where do we use crude? Crude Oil is refined and used primarily as fuel to propel automobiles all around the world. There are numerous other uses of crude and refined oil where it can be used as fuel and an intermediate.
Where we can buy crude from?As it is a natural resource, oil's production and sale is restricted to only few countries where it is drilled out. Different oil trading companies approach refineries or appropriate authorities within the oil producing countries and apply for its allocation. Once oil is allocated to these companies it can be further commercially sold and bought by end users of traders.
Where we can find sellers of crude?Crude trade is usually a supplier driven market where it is not that difficult to sale the product. Many refineries around the world are on look out of oil, also many trading companies are always open for a good spot deal. If someone is new in this business and has secure supply of oil he/she can start looking for end use buyer or trading buyer on various business to business websites on internet.
How to know if the person I am talking to a genuine buyer of crude? There are many people who pose actual buyers but that may not be stating correct facts about them. Best way to find if they are genuine is to ask them to share with you the proof of funds (POF) as you provide them with proof of product (POP) from your end. This way both sides can be assured they are in discussions with genuine trading partners.
Once you have gone all through the above process. You can consult your banker to further guide on different processes through which one can exchange product for money. Hope you have a secure and successful crude trading endeavour.