Monday, March 19th 2018


What are oil futures?

Interesting Question?   (3)   (11)

Answers (1)

13th Nov 2009 by JonB

Oil futures give you the right to buy or sell a certain amount of oil for a certain price, at a certain amount of time in the future. For example, the full size NYMEX oil contract, which trades as CL, gives you the right to buy or sell 1,000 barrels of oil anytime before expiration which occurs on the third thursday of expiration month.

If CL is trading at $150 a barrel, then one contract would essentially be worth $150,000 (150X1000 barrels) at that time (of course the margin for trading it is only around $4,000). If you hold that contract and oil jump $5 and is trading at $155 a barrel, it is now wroth $155,000 or $5,000 more than you paid for it. Which isn't a bad profit considering you only had to put up $4,000 to make $5,000.

There is a mini oil contract as well, but it's not as widely traded.

Like This Answer?   (0)   (0)
This answer is the subjective opinion of the writer and not of

11th Nov 2009 In Derivatives 1 Answers | 334 Views
Subjects: oil futures,

Answer This Question / Give Your Opinion
What are oil futures?

Answer: *

What country is this answer relevent to? *
Your Name: *

Enter Verification Number: *

Give Your Opinion
How to invest in UK shares?
Share a simple answer to help inform others:
Specific to any country?
First name / Alias

• Your answer will be posted here:
How to invest in UK shares?
Unanswered Questions in Derivatives
How risky is options trading?
What happens to options when a company is bought?
Why invest in options?
What happens to options in a reverse split?
What are the different types of equity derivatives?

Answered Questions in Derivatives
What is strike price in options?
What are gold futures?
What are futures and options?
What is a futures broker?
How risky is futures trading?
Ask A Question
Get opinions on what you want to know:
Specific to any country?