How to trade in Oil?

[Woroni]

Hi folks,

Anyone know how to trade in oil? Specifically, Light Sweet Crude (i.e. US oil). I would like to hold medium terms positions of anything up to 12 months (or more). I don't like CFDs because they are short term and most providers roll over the price from month to month, and as oil is rather volatile there can be big differences. I would like to know what are the best, most efficient ways to trade oil in both directions (long and short), assuming 3 examples, i.e. I have 10k, 20k or 50k to blow.

Anyone with any ideas? Or am I priced out of my game due to lack of cash?

Thanks for the help.

 

[wayneL]

Futures:

Full size contract = 1000bbl

emiNY = 500bbl

see www.nymex.com

Or you can trade USO, an exchange traded fund based on the above contract. (trades on the US stock market)

Pick your poison.

 

[ducati916]

Or Options: http://finance.yahoo.com/q/op?s=USO

jog on
duc

 

[jayhfd]

I'm also keen to trade oil, and have around the $5-10k mark (I've yet to decide exactly how to divvy up my portfolio).

I noticed IB has the following requirement:
"Prior execution of 100 or more trades (any product)"

That immediately rules me out. Are most brokers that give me access to international markets and commodities, futures, ETFs going to be similar?

I'd also like to know what people would suggest if I'm putting 5-10k into oil. I just want a buy and hold strategy for long term oil so I can profit from what I feel will be an eventual oil price sky rocket.

Futures or e-minis are probably going into the too hard basket, since I can't commit enough time to watching it, rolling over contracts, stressing over it, also its too highly leveraged for 5-10k... etc.

Stocks - I read that coal mirrors the oil/energy market prices, and so maybe companies like BHP could be ok for buy/hold. Oil prices go through the roof = energy stock prices do the same? Am I in the ball park here?

ETFs/ETCs - Not even sure if I can trade these, and I've only just begun learning about them. ASX doesn't seem to have anything so I guess I have to open an account that has USA access to get to the USO ETF for example.

Since I can't get with IB, who would be your choice for a good broker that has access to the US and doesn't have crazy high requirements?

Cheers!
Jay

 

[sinner]

I'm also keen to trade oil, and have around the $5-10k mark (I've yet to decide exactly how to divvy up my portfolio).

I noticed IB has the following requirement:
"Prior execution of 100 or more trades (any product)"

That immediately rules me out. Are most brokers that give me access to international markets and commodities, futures, ETFs going to be similar?

I'd also like to know what people would suggest if I'm putting 5-10k into oil. I just want a buy and hold strategy for long term oil so I can profit from what I feel will be an eventual oil price sky rocket.

Futures or e-minis are probably going into the too hard basket, since I can't commit enough time to watching it, rolling over contracts, stressing over it, also its too highly leveraged for 5-10k... etc.

Stocks - I read that coal mirrors the oil/energy market prices, and so maybe companies like BHP could be ok for buy/hold. Oil prices go through the roof = energy stock prices do the same? Am I in the ball park here?

ETFs/ETCs - Not even sure if I can trade these, and I've only just begun learning about them. ASX doesn't seem to have anything so I guess I have to open an account that has USA access to get to the USO ETF for example.

Since I can't get with IB, who would be your choice for a good broker that has access to the US and doesn't have crazy high requirements?

Cheers!
Jay

You can start a futures account with MB Trading with 400USD I believe. The account allows you to trade futures, equities and options on CME, ICE, NYMEX, COMEX as well as the major equity exchanges. That will give you access to CL, QM, USO and similar. They provide full L2 access.