Mini Crude Oil Options
The e-mini style of futures contracts are popular with individual traders. The mini-sized futures contracts are traded electronically and available on a wide range of indexes and commodity products. The e-mini Light Sweet Crude futures is the only e-mini contract for crude oil. However, there are some other mini- sized futures contracts in the energy sector that might also interest traders.
Other People Are Reading
-
E-mini Light Sweet Crude Futures
-
Each E-mini Light Sweet Crude oil futures contract is for 500 barrels of oil. This is half the size of the standard light sweet crude futures contract. The symbol for the e-mini crude contract is QM. The quoted contract price is per barrel of oil and the minimum price fluctuation, or tick, for the contract is 2.5 cents. Traders calculate the value change of a futures contract in ticks. For the e-mini crude contract, each tick is worth $12.50. The e-mini crude contract is a financial settlement futures contract. This means the trader runs no risk of owning 500 barrels of crude oil. Futures that have financial settlements are settled for cash on the termination date. Settlement dates are available monthly out to five years, but the majority of trading is done in the near-month contract.
Trading the E-mini Crude Futures
-
To trade mini-crude oil futures, a trader must have an account with a broker registered with the Commodity Futures Trading Commission (CFTC). Futures trades can be initiated by either buying contracts or selling contracts. Buying is called going long and anticipates a price increase in crude oil. Selling is called going short and a trader goes short if she thinks the price of oil will go down. To close a trade, the trader enters an offsetting short or long trade. For each contract traded long or short, the trader must put up a margin deposit with the broker. The margin deposit for the e-mini crude futures is $2,531 per contract.
-
Mini Energy Alternatives
-
In addition to the e-mini crude oil futures contract, there are a couple of petroleum product futures that have mini-sized contracts. Price movements in crude oil may also be reflected in these futures contracts. The E-mini Heating Oil Contract is for 21,000 gallons of heating oil and has the symbol QH. The price tick is 1/100 of a penny and equals $2.10 per tick. The margin deposit is $2,531 per contract. The E-mini RBOB Gasoline future is also for 21,000 gallons of gasoline with the same tick size as for heating oil. The mini-gasoline futures, symbol QU, has a margin of $3,206 per contract.
-
References
- Photo Credit oil well image by michael langley from Fotolia.com
