10th Nov 2009 by David Becker
There are three good alternatives available to investors to purchase oil commodities. The first way is to purchase oil futures. This entails opening a futures account with a futures broker. The New York Mercantile Exchange the Intercontinental Exchange and the Tokyo Commodity Exchange all offer futures on oil. A future is a contract to purchase a certain amount of oil on a specific date in the future. A second way to purchase oil commodities is to buy an exchange traded fund (ETF) that owns oil futures. The USO (United States Oil Fund - http://www.unitedstatesoilfund.com/uso_details.html) is an ETF that owns oil futures. By purchasing this ETF, an investor actually owns a portion of the oil futures owned by the fund. A third way to buy oil commodities is through an over the counter exchange. There are numerous platforms that allow investors to purchase oil in a contract format that speculates on the price of oil. These instruments are financially settled, and are usually leveraged.
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