Oil Trading And Binary Options

oil-trading-with-binary-optionsThe world is running on oil at this point. The entire market is revolving around this particular commodity. It is one of those assets, which is well regarded around the world. Something as simple as a car requires crude oil and without it, the entire world would stop. What about things such as cooking? Running factories? Everything would cease. The value of crude oil is obvious. Just turn on the news and you will hear about countries going to war in order to get a hold of countries with these assets. It is a powerful commodity, which holds a lot of sway around the world. Crude oil’s importance cannot be denied.

Crude oil has long been determined as something with limitless demand and the supply is running out as time goes on. The value is often changing and it is important to remain on top of things as news comes in and stocks plummet and/or rapidly increase.

Understanding Crude Oil Trading

This is just like all other commodities, it is traded based on futures. This is why it is traded on the binary options market.

The markets have three different types of crude oil on offer.

  • CL (Light Sweet Crude)
  • Brent Crude
  • WTI (West Texas Intermediate)

The New York Mercantile Exchange and ICE (Intercontinental Exchange) are responsible for the trading of these contracts. All WTI and/or light sweet crude oil contracts are dealt by New York Mercantile Exchange, while ICE deals with Brent Crude. Traders are able to look at the varying binary options to figure out how the assets are being dealt with and how they are fluctuating before making trades.

Requirements

For those who are looking to trade crude oil binary options, iti s important to understand margins when dealing with contracts of this nature. Most contracts are not going to be like a futures option (involving 1000 barrels). In fact, a trader is going to be able to lay something down as simple as $25. Of course, as time goes on, the trader should be looking to put more into play. This is why there are many trade contracts, which end up lasting no more than a few minutes before being looked at. The goal is to make sure the trader is getting the chance to trade more, while keeping the risk on their end as low as possible.

Trading Times For Trading Oil

It is important to remember the NYMEX opens at 9AM and lasts to 2PM EST (weekdays only).

While, the eCBOT lasts from 7PM to around 6:15PM EST (next day) only from Sunday to Friday.

These are the times when you are going to have specific access to these assets on the market. it is important to remain on top of these timings to make sure you are aware of when they are being traded.

Procedures

The first step is to set up a trading account (if you don’t have one) and begin by taking a look at the crude oil assets on the market. It is important to follow a few principles beforehand.

A trader should be looking to take a glance at technical indicators, chart patterns, and sandlestick patterns to read the market. This will ensure the trader has a better feel for what they are getting into. A trader that wants to make sure they are going after the asset and its direction will set up a touch/no touch contract. This means it will reach a certain level or not. The trader can set this touch/no touch set up to make sure the price has to hit a certain point before it starts to fall back. If it reaches the point, they are good to go regardless of how it falls back. It is definitely not simple, but it is a big part of how the asset works and how it should be managed for profit.

Remember, this is one of those assets, which is widely backed around the world. Just take a glance at how the markets can start to shift when oil takes a hit. Something as far away as the Libyan Civil War in 2011 made a massive difference in the market. The same goes for quotas that are set by OPEC because it starts to have an effect on supply and demand. These are factors traders have to be keeping an eye on at all times or they are going to get burned with no coming back. It is essential for those who are going to be diving into this market to make sure they are doing all of their research and keeping an eye out on how the demand is rising and fall. Those who do this are going to be successful and should be able to make a positive return on their money in the short and long term.

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