Crude Oil as a Commodity: Futures & Options
Crude oil is the world's most actively traded commodity, and the
NYMEX Division light, sweet crude oil futures contract is the world's
most liquid forum for crude oil trading, as well as the world's largest-volume
futures contract trading on a physical commodity.
Because of its
excellent liquidity and price transparency, the crude oil contract
is used as a principal international pricing benchmark. Additional
risk
management and trading opportunities are offered through options
on the futures
contract; calendar spread options; crack spread options on the
pricing differential of heating oil futures and crude oil futures
and gasoline
futures and crude oil futures; and average price options.
The crude oil contract
trades in units of 1,000 barrels, and the delivery point is Cushing,
Oklahoma, which is also accessible to the international spot
markets via pipelines. The contract provides for delivery of several
grades
of domestic and internationally traded foreign crude oils, and
serves the diverse needs of the physical market.
Light, sweet crude oils
are preferred by refiners because of their low sulfur content and
relatively
high yields of high-value products such as gasoline, diesel
fuel, heating oil, and jet fuel.
The Brent blend futures contract
is based on a light, sweet North Sea crude oil that serves as a
benchmark grade and widely
trades
as a differential to the NYMEX Division's bellwether light,
sweet crude oil futures contract. Most of the crude oil is
refined
in Northwest Europe, but significant volumes move to the
U.S. Gulf
and East Coasts.
Complementing the Brent crude oil futures
contract are an options contract, calendar spread options contracts,
and an options
contract on the Brent/West Texas Intermediate crude oil
spread.
More Information on Crude Oil Trading
Crude Oil Futures | Crude
Oil
Options | Free Crude Oil Report
Edge Financial Group is registered and licensed as
an Introducing Broker with the Commodity Futures Trading Commission,
the federal regulatory agency of futures and options. We are also
a member of the National Futures Association, a self-regulatory agency
working with the Commodities Futures Trading Commission. Our frim is fully licensed.
Please call to speak with an account executive:
1.866.986.EDGE
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