Become Oil Trader
Oil is definitely one of the foremost commodities that are widely used all over the world and because of it being highly in demand in almost all industry, the very oil industry has been a good place to invest in for you to earn a generous income that can help you in meeting your family’s needs.
If you want to become an oil trader in the near future, there are some vital facts that you need to learn and this article will provide you with that.
The oil industry is one of the biggest industries of the world today. With many establishments and companies needing oil, entering this venture is surely one lucrative venture that people will not want to miss. If you want to become oil trader, you must first know the fact that this is a no-sweat business for it is also encompassed of a lot of important aspects.
The Things You will Need
Contrary to what many people think, being an oil trader will not really require you to amass your own hedge fund or even an investment bank just so you can trade with contracts for crude oil. You also need not have a bank account that contains six figures. All of the individual oil traders can buy as well as sell oil contracts with a little investment, say, $ 1,000. What you will actually need if you are really decided to be an oil trader will be plenty of discipline and of course, an extra strong stomach. The industry of oil trading is highly volatile and you will surely experience here an extra bumpy ride.
The Oil Contracts
The oil contracts are usually traded represent crude oil barrels that are up to 1,000. The brokers in the internet will let you purchase future contracts with leverage that is usually 1: 100 which will only mean that virtually, you can buy a minimum of ten barrels. This kind of position can actually give traders a profit as well as loss amounting to $0.10 every time that the price of oil moves.
Advantage of Oil Trading
One advantage of oil trading is the fact that clients can benefit through market short selling. Short selling is the capacity of sell legally some future contract that will create an open position for the expectancy of a buy back in future time so that you can get a profit from market prices fall.
Futures of Crude Oil
Futures of crude oil can actually give traders the capacity sell or buy quickly without any delay in highly regulated or liquid market. Futures contract is being utilized to sell or buy fixed quality and quantity of underlying commodity, at a specified price and date in the near future. Future contracts can actually be broken down by just making a transaction offset. For instance, if you will buy a futures contract to be opened, you just have to sell a single futures contract so that the market position can be closed.