Trading Crude Oil
Brent Crude Oil is the trading classification for sweet light crude oil, which made up of a variety of crude blends drawn from the North Sea. It is the leading global price standard in Oil, and is used to price roughly ⅔ of global crude oil market. Named by the Shell UK Oil Company after the local Brent Goose, it is an acronym for the formative layers of an oil field: Broom, Rannoch, Etieve, Ness and Tarbat. Most Oil production thats comes from Europe, Africa and the Middle East and flows Westwards is priced in relation to Brent Crude. It should be noted that major blocs of Europe now import Oil supplies from Russia.
Since 2005 Crude Oil has been traded on the electronic IntercontinentalExchange, known as ICE. One contract is equal to 100 barrels and is quoted in U.S. Dollars. In the world of Forex, Crude oil is traded as a CFD using the same quantities relative to "barrels" with USD as a base currency( 1 Lot = 100 Barrels). Because of global demand, Crude Oil is seen as an extremely sensitive and volatile commodity that can jump dramatically in response to heightened political and economic circumstances. A clear example, would be the recent civil war in Libya which caused Oil prices to jump sharply from $85 to roughly $115 a barrel over a very short period of time. NSFX realizes how important having optimal Crude Oil trading conditions can be to the individual trader, and offers Crude Oil trading in G.B.P. as well as traditional U.S. Dollar pricing (shown as UKOIL and US OIL respectively).
Trading Crude Oil with NSFX
NSFX recognizes how important trading Oil is to any investor who takes the market seriously. As a result NSFX understands how important it is to provide the trader with the best possible market conditions.
- Fast Execution & Tightest Spreads Available.
- Trading Crude Oil via Multiple Platforms (Web, Desktop, Mobile).
- Balanced Leverage and Exposure , 1:100 , 1% of transaction value.
- Flexibility of trading a fixed spread on Crude Oil or variable ECN spread
Crude Oil Trading Conditions
0.1 Lots = 10 Barrels
|Lot Size||Min. Trade||ECN Min. Trade||Roll Sell||Roll Buy|
|UKOIL||6||5||1:100||1:100||100||0.1 Lots||0.1 Lots||0.9185||-5.784|
|USOIL||6||5||1:100||1:100||100||0.1 Lots||0.1 Lots||0.89225||-5.604|
Crude Oil Trading Examples
Now let’s see how some Crude Oil positions look in the actual market. The most straightforward way is by going through the calculations involved.
Let’s take a 100 Barrel “UKOIL” (1 Lot) position bought at a market price of $106.00 per/barrel. The USD value of the position will be: 100 Barrels X $106.00= $10,600. With a margin requirement of 1% (1:100 leverage) the result will be $106.00 required to open the position.
Now, let’s take a 1000 Barrel “USOIL” (10 Standard Lot) position bought at a market price of $85.00 per/barrel. The USD value of the position will be: 1000 Barrels X $85.00= $85,000. With a margin requirement of 1% (1:100 leverage) the result will be $850 required to open the position.
It should be noted a client may choose to speculate in Crude Oil in both GBP or USD, but margin requirements will be calculated by the currency base (USD, EURO,GBP) chosen for the account by the client.
Additional information regarding Crude Oil
At NSFX rollovers are dealt with on a "spot" basis only. Meaning that all positions are settled two business days from inception, as per market rules. NSFX will not facilitate actual physical delivery of either precious metals/currency.