Crude oil is one of the most actively traded commodities in the world today with the NYMEX crude oil futures contract being the world’s largest volume futures contract trading on a physical commodity.
Oil prices are volatile thus oil producers, traders and consumers are subject to the adverse price movements which could increase their cost and reduce their profits. This is why Energy Derivatives became increasingly popular risk management tools for many sectors of the industry since the 1970s.
Why Trade Energy Futures?
Excellent liquidity and price transparency
Additional risk management and trading/ hedging opportunities offered through options on the futures contract, calendar spread options, crack spread options on the pricing differential of different energy futures contracts
Mini-sized contracts like NYMEX Mini Crude Oil are available to allow individuals as well as corporates to participate in the highly liquid and volatile energy market