Oil’s importance in fuel and industry makes it one of the world’s most essential and widely traded commodities.
Because the price of oil is determined by a range of significant and sometimes unrelated factors, including economic supply and demand, political volatility in oil producing countries and even technological advancements in the production of alternate fuels, it is a highly volatile commodity. For traders, that volatility provides opportunities in the market and the ability to profit whether the market is rising or falling.
How does oil trading work?
When you trade oil with FIXI, you’re not actually buying any physical oil. Instead, you enter into a contract related to the real price of the commodity. This type of trade is known as a Contract For Difference, or CFD.
For example, let’s say you buy an oil contract at US$31.48 a barrel, believing the market price will rise by a certain time. If the price of the oil has risen at the expiry of the contract, you will make a profit based on the difference between the buy and sell price. However, if it falls below the buy price by expiry you will lose the trade.
Because you’re only trading on the price movement, an oil CFD can also let you profit from downward price movements. For example, let’s again say you wanted to buy an oil contract at US$31.48 a barrel, but this time believed the price will fall. If it fell, you would profit. If it rose, you would experience a loss. Profiting from downward price movements is one of the unique aspects of CFD trading; if you were purchasing physical barrels of oil rather than a CFD, you would not profit if the price decreased.
Using oil to leverage your trades
When you trade oil CFDs with FIXI, you’re able to take advantage of leverage. In effect, leverage means using a relatively small amount of capital to gain full exposure to a trade, thus freeing up more trading capital to allocate towards other trades as part of a diversification strategy.
One of the key attractions of trading with high levels of leverage is that you’re able to make more substantial profits from a small outlay. However, traders should be aware that higher leverage comes with higher risk and the potential for significant losses, sometimes more than the opening balance.
Benefits of oil trading with FIXI
FIXI offers real-time pricing on key oil contracts on West Texas Intermediate (WTI) and Brent Crude. When you trade oil with FIXI, there’s no dealer intervention, no brokerage fees and no commission on standard accounts. We also provide access to economic news, reports, charts and analysis to help you stay in touch with the latest pricing and be ready to take action when the market moves.
As one of the most widely traded commodities, oil can be a part of a diversified trading portfolio and risk management strategy.
Why Trade Oil?
- Low margins – as little as 1%
- No dealer intervention
- No brokerage fees and no commission on standard accounts
- Extremely competitive variable spreads
- High performing MT4 trading platform
- New, reports and charts to assist with your analysis
MT4 Code – Market Name – Open – Close – Break – Time Zone
WTI.fs – WTI Crude Oil (Future) – Sunday 17:00 – Friday 16:00 – 16:00 to 17:00 – Chicago
BRENT.fs – Brent Crude Oil (Future) – Monday 01:00 – Friday 23:00 – 23:00 to 01:00 – London
All times are correct at date of issue. Please refer to the product schedule for contract specifications and trading hours.