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Posted: Fri 8:08, 01 Nov 2013 Post subject: peuterey outlet Crude Oil Trading Explained - writ |
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Crude Oil Trading ExplainedArticle Summary: A trader who would like to benefit from movements in the price of crude oil can do it in a variety of ways. You can also trade in crude oil through Exchange Traded Funds, Futures, CFDs, by buying the shares of oil exploration companies, through royalty trusts and by
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A trader who would like to benefit from movements in the price of crude oil can do it in a variety of ways.
The most direct, though costly, way to trade in crude oil would be to buy your own oil well but, fortunately, that is not necessary.
You can also trade in crude oil through Exchange Traded Funds, Futures, CFDs, by buying the shares of oil exploration companies, through royalty trusts and by opening a spread betting account, to name but a few options.
A futures contract is simply an agreement between a buyer and a seller where the seller agrees to sell a certain quantity of a product to the buyer at a future date at an agreed price.
You can buy and sell crude oil futures contracts through a variety of brokers. However, before you can make a trade, you usually have to deposit roughly 5% of the total value of oil you are trading in. This is called the margin. You are still exposed for the [url=http://163y.uueasy.com/read.php?tid=918627]www.corsodiesperanto.it/peuterey.php Study more over Resin Chaise Lounge - writt[/url] total value of [url=http://www.tagverts.com/barbour.php]barbour deutschland[/url] the trade but you only have to pay a relatively small part of it up front.
That means crude oil futures trading is a leveraged form of [url=http://www.par5club.com/louboutin.php]www.par5club.com/louboutin.php[/url] trading, which holds both benefits and risks as we shall discuss later.
This works in a very similar way to futures trading, although there are vital differences.
For example, the margin with an exchange traded fund could be 50%. For a andpound;10,000 trade you would therefore have to [url=http://www.tagverts.com/barbour.php]barbour online shop[/url] initially deposit andpound;5,000. ETFs are [url=http://www.marrakech-hotel.fr]www.marrakech-hotel.fr[/url] also not generally traded 24 hours a day, but during normal stock market trading hours.
With spread betting you never actually buy physical crude oil, you simply speculate on whether the price will go up or down. As a [url=http://www.rtnagel.com/louboutin.php]louboutin pas cher[/url] result, trades are often completed in the order of a few seconds.
In fact this also means that many spread betting companies offer 24 hour trading, five days a week, on a wide range of other financial markets from the same spread betting account.
With financial spread betting you will also be required to put down a relatively small deposit, or margin, before you [url=http://www.958tuan.com/xinxi/forum.php?mod=viewthread&tid=49827]www.corsodiesperanto.it/woolrich.php Lysine for Cold Sores - Strong Medicine For[/url] can make a trade, although the margin level varies depending on the market [url=http://www.thehygienerevolution.com/hollister.php]www.thehygienerevolution.com/hollister.php[/url] and the company. On some markets such as Brent Crude Oil and US Crude Oil some spread betting firms will [url=http://www.corsodiesperanto.it/woolrich.php]www.corsodiesperanto.it/woolrich.php[/url] only ask for 1% of your total exposure on a trade in advance.
Being able to profit from the full [url=http://whpureplanet.com/news/html/?132410.html]www.tagverts.com/barbour.php Bunk Bed Plans For Children - written by bob weeden[/url] price movement of an oil trade, whilst only paying a relatively small margin up front, obviously has its benefits.
However, that is also where the risk lies. If the trade were to go against you then you may lose more than the amount you initially deposited.
One way to reduce the risks when trading with a highly leveraged form of investment, such as spread [url=http://www.corsodiesperanto.it/moncleroutlet/]moncler outlet[/url] betting, is to make use of a guaranteed stop loss. This way you can determine your maximum loss before you start trading.
Spread betting is a leveraged form of investment, it involves a high level of risk to your capital and can result in losses that are greater than your initial deposit. Please [url=http://www.mxitcms.com/abercrombie/]www.mxitcms.com/abercrombie/[/url] ensure that it matches your trading requirements as it may not be suitable for all types of investor. Before you start trading, make sure that you [url=http://www.rtnagel.com/airjordan.php]nike air jordan pas cher[/url] are fully aware of the risks. Only speculate with funds that you can afford to lose. Where you feel it is necessary request independent financial advice.
Robert Thomas is a seasoned spread trading professional who offers both strategic views and tactical analysis [url=http://www.mxitcms.com/abercrombie/]abercrombie milano[/url] on the stocks and shares, commodities and forex markets.
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