Crude oil is often described as “black gold” around the world. It’s one of the most sough-after commodities and is traded in high volumes. Moreover, people choose to trade crude oil because out of all the other commodities such as precious metals, base metals, agri commodities, etc., crude oil had the highest volatility and is consequential to daily trade. The world economy heavily relies on crude oil’s distribution.
Crude oil is imports-independent and is traded in millions of tons every single day. You can say that it is that one commodity that can perform well under all types of market conditions. This is why crude oil trading in India is highly successful.
In addition to this, the investors around the globe trade crude oil with great profit margins because it involves frenzied daily market activity as well as has a huge volume in the everyday trade – the market offer profitable trading opportunities all from the comfort of the investors’ desks!
When traders start getting the hang of crude oil’s price variations and market trends, when they understand how the crude oil market works completely, they can easily generate significant ROI on their crude oil stocks. Whether it is with their short-term strategies or the long-term strategies – there is a full array of options to get benefitted and profited from.
Now let us talk about some major things, that you must know to get you started with crude oil trading –
First of all, you need to read a lot. Understand that when crude’s production or supply faces some challenges, price fluctuations occur which further leads to unintended domestic consequences in multiple parts of the world. Many countries, for this exact same reason, try to calibrate their taxes & fuel policies according to their bills of crude oil import. The same thing stands true for crude dependent firms, which mark their product & services’ prices accordingly.
How Does Crude Oil Trading Work?
Buying or selling crude oil options or futures is termed as crude oil trading. It is all about how you make the right speculations and earn the profits, which further involves speculating on short-term price movements of crude oil and analysing crude’s real value.
There are some of the popular ways in which you can trade crude oil –
- Oil Spot Price
Oil spot prices are known as the cost of buying or selling oil immediately i.e., on the spot, instead of the prices at a set date in the future. Unlike future prices, oil spot prices represent the current worth of a commodity. - Oil Futures
Oil futures are those contracts in which investors & traders agree to exchange an amount of crude oil at a defined or specified price on a specific date. These futures are traded on exchanges and show the demand of different oil types. - Oil Options
Oil options are somewhat similar to futures but with the options contract, investors have more freedom. They do not have any obligation to trade if they do not want to. Options give investors the right to trade oil online at a set price on a specific date (expiry date), however, they are not obliged to exercise it.
What is the best way to invest in crude oil trading?
The best way to invest in crude oil trading in India is via the CFDs. It is one of the most popular ways of trading in this country and is profitable as well. It allows the investors to start trading with low initial capital as it involves margin trading and with that, investors only have to deposit a partial amount & the rest is covered by their broker.
Strategies for Profitable Crude Oil Trading
India, China, and several other Asiatic countries are the net importers of crude oil. These are the countries that often keep oil futures going. With this, there is continuous movement in the market and crude oil prices which brings investors even better chances of profitability.
To make your oil trading experience profitable, here are some crude oil trading strategies that you can follow –
- Buy & Hold
Buy & Hold is the most followed & probably the best crude oil trading strategy. Demand & supply factors are analysed by traders & they then take calculated positions. If the predictions work positively i.e., in their favour, they close the positions to book profits before expiry. - Technical Analysis
Crude oil trading is more often based on technical indicators like candlesticks, bar charts, and/or the volume of crude oil trading. Traders smartly predict crude oil’s future prices with the help of these technical indicators, further analysing the right time to trade and then they book profits on trades. - Swing Trading
With a swing trading strategy, traders buy & hold crude oil for a short time period of time. This duration can range from a few minutes to as long as 3-4 days. Crude oil swing traders look out for short-term changes in the demand & supply, technical analysis, charts, as well as determine the market trends accordingly to book their profits. - Spread Trading
Spread trading is when traders buy a crude oil futures contract in one month and then sell another futures contract in the next month. Traders profit from the expected change between the buy and sell price of both their contracts.
What is Crude Oil Trading At?
Currently, crude oil trading is trading at the following rates –
- WTI Crude Sell & Buy – 64.40 & +0.54
- Brent Crude Sell & Buy – 67.88 & +0.61
- Natural Gas Sell & Buy – 2.945 & -0.015
- Indian Basket Sell & Buy – 63.85 & +0.66
- Dubai Sell & Buy – 62.75 & +0.13
To start crude oil trading in India, the first thing you to do is find a trusted, regulated broker on which you can easily rely and the broker that fulfils all your trading requirements.
With Capitalxtend, you get access to hundreds and thousands of trading opportunities in the world’s most popular and most traded markets. You get to trade with the fastest execution speed, lowest spreads, and intuitive trading tools.
Experience exceptional trading environment with Capitalxtend. Register now to make the most of crude oil trading opportunities. If you are a beginner, you can start with a Free demo account to practice trading before entering the real-time markets!
