Spread Betting on US Crude Oil

Where to Spread Bet on US Crude Oil

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A Guide to Spread Betting on US Crude Oil

The Spread Trading Market:	US Crude Oil (March) Futures
The Spread:	$98.45 - $98.50
How This Works:	You can speculate on the US Crude Oil Futures market settling:   Higher than $98.50, or   Lower than $98.45 When the market closes on the closing date for the 'March' market, 17 February 2012. Be aware that, because this is a futures market, your trade will automatically close when the March US Crude Oil futures contracts are settled, 17 February 2012, but you can also choose to close your spread bet before the expiry date.
Traded Units:	Trades on the US Crude Oil market are priced in £x per cent. Where a cent is $0.01 of the energy's price movement. E.g. if US Crude Oil changes by 30¢ ($0.30) then you would lose / win 30 multiples of your stake.
Stake (Trade Size):	You choose your stake per cent, e.g. £2 per cent, £3 per cent, £15 per cent etc.
Simplified Trading Exercise:	If, as an example, your stake was £3 per cent and US Crude Oil moves $0.28 (28¢), you would lose or gain £3 per cent x 28¢ = £84.

Fully Worked Spread Trading Example | Taking a Bullish View of US Crude Oil

You Choose Whether to Buy or Sell:	Where do you think that US Crude Oil will close on 17 February 2012:   Higher than $98.50? or   Lower than $98.45?
Let’s Assume You Want to Buy:	Higher than $98.50
You Select Your Stake Size, Let's Say You Choose:	£3 per cent
What Happens Next?	You will win £3 for each cent ($0.01) US Crude Oil closes above $98.50 Your spread bet loses £3 for every cent ($0.01) US Crude Oil closes below $98.50
When Buying a Market Your Trading P/L =	(Settlement Level - Opening Level) x stake per cent
Scenario 1	US Crude Oil pushes higher and the price of the futures market is revised and changes to $98.92 - $98.97.
Time to Lock in a Profit?	You may choose to keep your futures spread bet open until expiry or close it to lock in a profit. For this example, you choose to settle your position at the current price by selling at $98.92.
Your Trading P/L =	(Settlement Level - Opening Level) x stake per cent
	($98.92 - $98.50) x £3 per cent
	$0.42 x £3 per cent
	42¢ x £3 per cent
Your Trading P/L =	£126 profit
Scenario 2	US Crude Oil goes lower and the oil spread betting market is revised and moved to $98.03 - $98.08.
Close and Limit Your Loss?	At this point, you may choose to let your futures spread bet run to expiry or close it, i.e. close your trade and restrict your losses. For this example, you decide to close your bet now by selling the market at $98.03.
Your Trading P/L =	(Settlement Level - Opening Level) x stake per cent
	($98.03 - $98.50) x £3 per cent
	-$0.47 x £3 per cent
	-47¢ x £3 per cent
Your Trading P/L =	-£141 loss

Worked Spread Betting Example | Going Short of US Crude Oil

You Decide to Go Long or Short:	Where do you feel that US Crude Oil will settle on 17 February 2012:   Higher than $98.50? or   Lower than $98.45?
Let's Assume You Want to Go Short:	Lower than $98.45
You Select Your Stake, Let's Assume You Opt For:	£2 per cent
So What Happens Next?	Your spread bet loses £2 for every cent ($0.01) US Crude Oil closes higher than $98.45 You will win £2 for every cent ($0.01) US Crude Oil settles lower than $98.45
When Betting on a Market to Fall Your Trading P/L =	(Opening Level - Settlement Level) x stake per cent
Scenario 3	US Crude Oil pushes lower and the quote for the futures market is revised and set at $97.92 - $97.97.
Take Your Profit?	At this point, you could decide to keep your futures trade open until expiry or close it to take your profit. For this example, you opt to close your trade at the current market price and buy at $97.97.
Your Trading P/L =	(Opening Level - Settlement Level) x stake per cent
	($98.45 - $97.97) x £2 per cent
	$0.48 x £2 per cent
	48¢ x £2 per cent
Your Trading P/L =	£96 profit
Scenario 4	US Crude Oil climbs and the quote for the spread betting market changes to $98.94 - $98.99.
Close and Restrict Your Loss?	You could now opt to leave your futures trade open until expiry or close it, i.e. close your trade to limit your losses. In this instance you choose to close your bet at the current quote by buying at $98.99.
Your Trading P/L =	(Opening Level - Settlement Level) x stake per cent
	($98.45 - $98.99) x £2 per cent
	-$0.54 x £2 per cent
	-54¢ x £2 per cent
Your Trading P/L =	-£108 loss

US Crude Oil Notes:

• Financial spread trading prices obtained from InterTrader, 1 February 2012
  
  
• US Crude Oil is traditionally priced in dollars per barrel
  
  
• Investors are also able to speculate on US Crude Oil in euros per cent and US dollars per cent
  
  
• In addition, financial spread trading also allows you to gain access to a large variety of other assets. For additional details also read:
  
  
  • Spread Betting on Indices
  • Spread Betting on Foreign Exchange Pairs
  • Spread Betting on Stocks and Shares

Demo Accounts for Spread Betting on US Crude Oil

Spread Betting
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Spread Betting on Commodities

• Spread Betting on Commodities
• Spread Betting on Gold
• Spread Betting on Crude Oil