Guide to Crude Oil Futures Spread Betting

Support: +44 (0) 203 301 0483 | support@financialspreads.com
Financial Spreads: Spread Betting and CFD Trading

Losses can exceed deposits
Crude Oil Spread Betting


Where Can I Access Live Crude Oil Prices?

Financial Spreads offers real-time pricing on more than a thousand CFD and spread trading markets like Brent crude and US crude and an array of other commodities, stock market index, shares and forex markets.

Where Can I Get Live Crude Oil Charts?

When trading with FinancialSpreads you can look at a real time charting package for Brent crude oil, US crude oil and over 1,000 other financial spread betting and CFD markets.

As well as several display styles, the charting package has a wide range of options. These include:
Sample commodities candlestick chart:

Commodities Spread Betting Charts



A Guide to Spread Betting on Crude Oil

The following example is based on US crude oil, for a Brent crude oil example click here.

Let's suppose you log on to FinancialSpreads.com and the platform is showing a quote of:

  US Crude Rolling Spot Sell

5366.0
Buy

5369.0


Here is a brief guide to how it works...

Market:US Crude Rolling Spot
Quote (The Spread):5366.0¢ - 5369.0¢
This Means:You can bet on the US Crude Rolling Spot market to go:

  Spread Betting Above 5369.0¢, or
  Spread Betting Below 5366.0¢

This is a Rolling spread bet so it does not have an expiry date. If you decide not to close your trade and the trading session ends then your position will automatically roll over to the next trading day.

If a trade is rolled over then you will normally either receive or pay a small fee for overnight financing based on whether you are speculating on the market to fall or rise. For additional details see Rolling Spread Bets.
Trading Units:Bets on the US Crude market are priced in £x per cent.

Where a cent is 1¢ of the commodity's price movement.

E.g. if US crude moves 50.0¢ then you would lose or gain 50 times your stake.
Stake (Trade Size):You work out how much you would like to risk per cent, e.g. £1 per cent, £5 per cent, £15 per cent etc.
Simplified Trading Example:If, for example, you went with a stake of £2 per cent and US crude moves by 32.0¢, you would lose/win £2 per cent x 32.0¢ = £64.


Worked Spread Trading Example - Taking a Bullish View of Crude Oil

Financial spread betting on the energy market to go up

You Choose Whether to Go Long or Short: US Crude going:

  Spread Betting Above 5369.0¢? or
  Spread Betting Below 5366.0¢?

You Might Decide to Go Long:   Spread Betting Above 5369.0¢
You Select Your Stake, Choosing: £3 per cent
What Happens Now?
  • You will make £3 for every cent US crude pushes above 5369.0¢
  • Your spread bet loses £3 for each cent US crude goes below 5369.0¢
If You Are Buying a Market Your Trading P/L = (Closing Price - Initial Price) x stake
 
Example 1
US Crude increases and the financial spread betting market is revised and set at 5406.6¢ - 5409.6¢, so you'd see this on Financial Spreads:   5406.6   5409.6
Time to Take Your Profit? At this point, you could opt to keep your position open or close it to take your profit. For this example, you opt to settle your position and sell at 5406.6¢.
Your Trading P/L = (Closing Price - Initial Price) x stake
(5406.6¢ - 5369.0¢) x £3 per cent
37.6¢ x £3 per cent
Your Trading P/L = £112.80 profit
 
Example 2
US Crude pushes lower and the market adjusts and moves to 5326.0¢ - 5329.0¢:   5326.0   5329.0
Close and Restrict Your Loss? You may choose to keep your position open or close it, i.e. close your trade to limit your losses. For this example, you opt to close your trade by selling the market at 5326.0¢.
Your Trading P/L = (Closing Price - Initial Price) x stake
(5326.0¢ - 5369.0¢) x £3 per cent
-43.0¢ x £3 per cent
Your Trading P/L = -£129.00 loss


Spread Betting Example - Shorting Crude Oil

Spread betting on the energy market to go down in value

You Now Decide Whether to Go Long or Short: US Crude moving:

  Spread Betting Above 5369.0¢? or
  Spread Betting Below 5366.0¢?

Let's Say You Want to Sell:   Spread Betting Below 5366.0¢
You Select How Much to Risk, Let's Say You Opt For: £2 per cent
So What Happens Now?
  • Your spread bet loses £2 for each cent US crude rises above 5366.0¢
  • You will make £2 for each cent US crude falls below 5366.0¢
If You Are Selling a Market Your Trading P/L = (Initial Price - Closing Price) x stake
 
Example 3
US Crude goes lower and the spread trading market is revised and is set at 5314.2¢ - 5317.2¢. Therefore you'd see this on Financial Spreads:   5314.2   5317.2
Lock in Your Profit? At this point, you could decide to keep your spread bet open or close it, i.e. close your spread bet to lock in a profit. In this instance you decide to settle your trade by buying at 5317.2¢.
Your Trading P/L = (Initial Price - Closing Price) x stake
(5366.0¢ - 5317.2¢) x £2 per cent
48.8¢ x £2 per cent
Your Trading P/L = £97.60 profit
 
Example 4
US Crude pushes higher and the spread betting market is revised and changes to 5418.8¢ - 5421.8¢. I.e. the market moves to:   5418.8   5421.8
Restrict the Loss?At this point, you may decide to leave your trade open or close it in order to limit your losses. In this example you decide to close your bet and buy at 5421.8¢.
Your Trading P/L = (Initial Price - Closing Price) x stake
(5366.0¢ - 5421.8¢) x £2 per cent
-55.8¢ x £2 per cent
Your Trading P/L = -£111.60 loss

Tax-Free* Crude Oil Spread Betting

Financial spread betting, including crude oil spread betting, is currently tax-free in the UK. Note though, tax treatment depends on the individual circumstances of each client and may change in the future.

Where Can I Practice Financial Spread Betting on Crude Oil?

FinancialSpreads let's you put your trading skills to the test by using a free Demo Account, test markets include US crude, Brent Crude and the Brent crude / US crude oil differential.

The Demo Account also lets you access to a range of other markets such as indices, forex and shares.

Open a Free Demo Account.


Crude Oil Trading Information and Data

Further news and information on the crude oil markets: Financial Spreads is not responsible for the content of external / third party websites.


Crude Oil (US Light Sweet) Commitments of Traders Report - 10 Jan 2017


Futures Only Positions, NYME, Code 67651, (Contracts of 1,000 barrels)

Reporting Firms Non-Reportable Positions
Non-Commercial
Commercial Total Reportable
 
Commitments Open Interest Commitments
Long Short Spreads Long Short Long Short Long Short
604,261 170,699 725,731 671,494 1,136,894 2,001,486 2,033,324 2,114,656 113,170 81,332
 
Changes from 3 Jan 2017 Change in Open Interest Changes from
Long Short Spreads Long Short Long Short Long Short
-3,856 2,656 -5,236 31,316 29,952 22,224 27,372 25,332 3,108 -2,040
 
Percent of Open Interest for Each Category of Trader
Long Short Spreads Long Short Long Short   Long Short
28.6% 8.1% 34.3% 31.8% 53.8% 94.6% 96.2%   5.4% 3.8%
 
Number of Traders in Each Category Total Traders  
Long Short Spreads Long Short Long Short    
169 101 195 109 128 382 350 438    
 
Long/Short Commitments Ratios   Long/Short Ratio
Ratio   Ratio Ratio   Ratio
3.5:1   1:1.7 1:1   1.4:1
 
Net Commitment Change  
-6,512  


Contact Customer Support

+44 (0) 203 301 0483
support@financialspreads.com

Also see: