Trading crude oil futures is exceedingly popular. Many traders worldwide choose to incorporate this commodity into their portfolio on a regular basis and they have many reasons to do so. Oil trading has quite a few advantages and we will list some of the main ones right here. Read through and decide if you ought to start trading this trendy commodity.
- Oil is Familiar Territory – Even if you are new to the world of online trading, this asset is bound to feel like an old friend. You may not have heard about specific indices or even don’t know the whole range of tradable currencies, but everyone, and we do mean everyone, has heard about oil. Many traders enjoy dealing with this particular commodity because they feel that they have a better understanding of it and of the factors that affect its price.
- There is a Lot of Information and It’s Freely Available – Because oil is, as we’ve just mentioned, familiar territory, there is a lot of data about it. You don’t even need to look very far: The news, financial websites or experts on television – everyone is discussing oil price regularly. It is relatively easy to collect information that could help traders make decisions and you can always find many professionals that share their insights with anyone that would listen. This fact is crucial because in online trading, knowledge and data are extremely valuable.
- Correlation with Other Commodities, Shares and Indices – According to some investors and market experts, oil has a correlation with specific currencies, indices and shares which can help trained traders make predictions. Keep in mind that there is no proof that these correlations work all the time, or that they even exist, but for traders that believe that there is a connection, oil is seen almost as an indicator, hinting on what a specific asset might do next.
- High Volatility – This commodity is very volatile, which provides traders that manage to stay ahead of the market with promising opportunities. This is anything but a study asset. Changes in price can be quite radical and for those who manage to predict the direction, this can mean large profits.
- Leverage – Thanks to leverage trading, people can now invest a relatively low sum and open a position on a much larger deal. $100 can be enough to open a deal worth up to $40,000, which can in turn mean much larger profits. Remember though that leverage can also be a disadvantage and you may lose your investment very quickly.
These are just a few of the advantages that inspire people to trade oil futures but we assure you: There are many more. Start trading this commodity online and learn how you can profit from any change in price.