I want to buy stock (futures) on light sweet crude oil? I have a scottrade account and I'm ready to go but I can't figure out what symbol to place in. I don't understand the contracts aspect. I appreciate any insight. Thanks!
2006-12-13 02:29:13 · 9 answers · asked by Eric C 1 in Business & Finance ➔ Investing
The first two posters are correct. First, you need to do A LOT of studying in regards to futures contracts - they are THE RISKIEST investment out there.
Now, to answer your question, the ticker symbol for light crude is "CL". They way it works is this: say you are expecting crude oil to go up, so you buy the January 2007 Crude oil contract. The ticker symbol would be CLF7 - CL is the ticker symbol for Crude Oil, F is the month code for January and 7 is the year, ie, 2007. The margin (which is a good faith deposit) for crude is $3,375 per contract. One contract controls 1,000 barrels of crude oil and with crude currently trading at $61.65/bbl, that means, you're controling $61650.00 of crude oil for a margin of $3,375, or roughly 18:1 leverage.
Crude oil is quoted in dollars and cents per barrel, so let's say that you bought the 1 crude contract at $61.65 and let's say crude really sky rockets and goes up to $79.75 per barrel. That's $18.10 per barrel ($79.75 - $61.65). Since 1 crude contract is 1000 barrels and you made $18.10 per barrel, you saw a gross profit of $18,100. BUT, let's say oil got hammered and dropped $18.10 a barrel, then you'd loss $18,100 and you'd lose your entire margin of $3,375 plus have to pay an additional $14,725 to cover the loss. Now do you see why futures are extremely risky?
Also, you must be aware of contract expiration. The January 2007 contract actually expires at the end of Dec. 2006 (not all futures contracts are like this, most expire in their contract month). If you do not close out the contract, or roll it over into a new contract month, they you are going to be stuck with purchasing 1000 barrels of crude oil, or sell 1000 barrels of crude oil (depending if your long or short).
I would recommend staying out of futures until you are fully educated to them and that you have the risk tolerance levels to handle them.
2006-12-13 05:26:48 · answer #1 · answered by 4XTrader 5 · 0⤊ 0⤋
1
2016-12-24 00:17:17 · answer #2 · answered by Anonymous · 0⤊ 0⤋
I do not know for certain, but I strongly suspect that Scottrade does not deal in futures. However, there is an index fund that you can invest in that tracks the price of West Texas Intermediate. USO is the symbol. Currently trades at about $52.55. Down about 20% since inception. But if it were me, I would purchase a pool of oil stocks instead rather than the index based on raw oil. That way you will at least receive a dividend. IYE is one although it is very heavily weighted toward Exxon and Chevron. IXC is another also somewhat heavily weighted towards Exxon. PXE is more evenly weighted amongst oil producers. That is the one that I would prefer to hold.
2006-12-13 03:52:29 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Crude oil investments would be getting into the Futures Markets. promise yourself that if you investigate this area to be VERY careful. Much time or years involved to trade like this with no promise of gains. If you do someday, I suggest close to the money option contracts only. You would have to find that right timing to buy. Might want to have a consultation with someone in the know if any stocks/company may qualify for this type of investment. Stay in the USA. No overseas stuff. In the Futures markets watch your wallet and remember the X files saying...trust no one....
2006-12-13 03:03:20 · answer #4 · answered by medelectric2002 1 · 0⤊ 1⤋
Not a stock. Commodity future. Have to perhaps file some more paperwork to be allowed to trade futures & you should not unless going to watch it minute by minute. Just buy PEO or XOM (Exxon) & stay away from speculating.
2006-12-13 02:55:54 · answer #5 · answered by vegas_iwish 5 · 0⤊ 1⤋
Oil shares do no longer song the cost of oil. the sole thank you to do it incredibly is to commerce oil futures. Then that could make you one among those evil speculators that Barack Obama and all the Democrats opt for to harm. Goo luck.
2016-10-05 06:30:57 · answer #6 · answered by ? 4 · 0⤊ 0⤋
Try Lind-Waldock. (Ask for Oren Basse and tell him Rabbit recommended him)
2006-12-13 03:24:53 · answer #7 · answered by Rabbit 7 · 0⤊ 0⤋
Not quite sure how to answer this
2016-07-28 05:58:48 · answer #8 · answered by Anonymous · 0⤊ 0⤋
thanks for the answers EVERYONE xx
2016-08-23 12:48:03 · answer #9 · answered by Anonymous · 0⤊ 0⤋