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Home / How to Trade Oil

How to Trade Oil

Learning how to trade oil is a pursuit of many private commodity traders. Oil is one of the market’s most frequently traded commodities. It is an essential commodity globally, required across multiple industries. Yet, the same elements that make demand for oil high also make knowing market prices problematic. Knowing how to trade oil can be challenging, but potentially very rewarding. The diversity of forms, companies, and regions that oil originates from make determining winning trades a coveted skill. In fact, everything from weather patterns to war can impact oil prices, making gathering and understanding a variety of information crucial when learning how to trade oil.

Oil can be traded using several different types of financial instruments. Options, futures, CFDs, spread bets, exchange traded funds (ETFs) and more can give access to oil. Determining the best product and strategy for how to trade oil can be very difficult given the number of methods available. Trading, of course, is a very individualistic endeavour. At Accendo Markets, CFDs are the most popular instrument used to trade oil.

Volatility

Market volatility can be an important consideration when determining how to trade oil. Rapid price changes, coupled with leverage can make a winning trade into a loss in a matter of seconds. Part of this is because of an increase in large companies trading commodities. A large financial institution, making a large trade, may move the price of oil a whole percentage point, rather than a few cents in either direction. Conversely, these moves can also result in significant profits. It is important that the trader takes steps to mitigate these risks by using tools such as stop-losses, and maintaining trading discipline whilst learning how to trade oil.

Hedging

Large companies that use oil regularly, such as airlines, utilities companies and more, use oil futures as a hedging method. When learning how to trade oil, knowing this information can often give investors information into where those investors believe oil prices will go. In a futures contract, a purchaser typically buys the right to purchase 1,000 barrels of oil (e.g. light sweet crude oil) at a particular price on a certain date. If, on that date, the price of oil is higher they can purchase the oil at the lower rate. If the price is lower than that which is stipulated on the contract, the purchaser is obligated to buy the oil at that price. Taking an offsetting position (e.g. another futures contract) for the same number of barrels for the same time period can close positions, so a trader does not need to wait for expiry.

Different Instruments

Buying futures contracts is one method of many when considering how to trade oil, yet for many it proves inconvenient, old-fashioned and cumbersome. Another method for trading oil is using CFDs. CFDs allow you to learn how to trade oil whilst limiting your risk with guaranteed stop-losses. This means that you’ll know your downside, with certainty, before entering into the trade. You can trade CFDs with Accendo Markets, either online or via a broker. Whatever you choose, your dedicated broker can help you learn how to trade oil.

Oil ETFs (exchange traded funds) are a simple way to bring this commodity into your portfolio. Accendo Markets offers ETFs on CFDs. As with a future and CFD, you do not actually own the oil. Rather, the fund consists of other forms of financial instruments (for instance options, futures, and forward contracts for different petrochemicals) and an investor owns a portion of those underlying instruments. Many traders like ETFs as they are very simplistic to both purchase and sell, much like CFDs.

Don’t forget, all financial products mentioned on this page are leveraged. Please pay attention to the risks before learning how to trade oil.

 

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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
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George

I have found Accendo staff very helpful,,and informed. I have traded with you for some years now and have no regrets. Keep up the good work!

Posted 3 years ago

Shaun D

since signing up for Accendo I have had two traders, Mark and Sam. I have found both of these to be very informative about how CFD's work and they have made it very easy for me. Since working with Sam (last four months) my trading knowledge has improved and I can make more informative decisions about which Company's to invest with. Keep up the good work Sam.

Posted 3 years ago

Anonymous

I am very happy with the service I get from Accendo Markets and in particular Amrit Panesar. He is very professional and pleasant to speak to and this counts for a lot.

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Shreekant P

Its a good site for dealing stocks worldwide and having good staff.

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Nick W

Krishan Appiah is one of the most dedicated / informative broker I have ever had.

Posted 3 years ago

Thomas I

Since I have been trading with Accendo Markets I have experienced much greater success than has been my experience with other trading companies mainly due to the help given by, what I consider to be my terminal with the trading floor, Mark, who has been most helpful in reminding me of the progress of my positions throughout the day and keeping me in touch with those positions so that I can more easily make successful trades when appropriate instead of missing out on opportunities through lack of attention. He draws my attention to the situations and enables me to make profitable trades. I am very happy with the situation at the moment and am enjoying the experience. Thomas Irving.

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Kartik A

Accendo markets keep me connected with the market and its very well followed by Mr. Krishan Appiah ,which helps me to take certain decision on time.

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Peter p

I have been trading with Accendo Markets and James Abbott my account manager for coming on 5 years now, James Abbott the senior trader of Accendo Markets provides me with up to minute information when I need it and find him very easy and professional to deal with. Whenever I need to trade or am not sure about anything James is always their to help with any queries I may have. The Accendo Platform I find very easy to use and navigate although it has been slightly changed over the years but definitely for the better. Personal when I do trade 90% of the time, I rather telephone call to place my trade dealings and if James is not there to take my call I find others at Accendo like Sam, Lee take my trades and are. All in all everyone at Accendo Markets are amazing to deal with and my relationship with Accendo is just as I like it. Peter Petrou

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Mrs. J

"Our Trader, Aymen Azizi, has been nothing but attentive to our every need throughout our long relationship with him. No issue is too small, full explanations on all our questions."

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Brian R

I have been with Accendo for a long time now, ten or twelve year's, probably more . As I told Sam (my trader) I thought that CFDs were better than sex . I stopped trading for a few years and only started back about a couple of months ago. But it is as if I had never been gone , so to speak. Sam has helped me every step of the way, at my age one forgets things. I have only praise for Accendo and as far as I am concerned the platform is the best . Now I am back trading at 71 years of age, I might even try sex again. Brian Robertson.

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Jim W

I understand how to make a profit with CFDs. I am restricted by the range of companies I have knowledge of. Although, I am not sure that is a big problem. Tom Robertson is a very fine man.

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Rebekah S

Well, I would not be trading without the help of my trader, Sam Alnakkash. He provided a really great overview of Accendo Markets, an insight into trading in general and how to get started in trading online. His advice, support and training has been fantastic all along the way, enabling me to start trading earlier than I would have done had I not had the support. He has also been very adept at understanding me as a client in order to help me achieve my trading goals. I still have a lot to learn and hope I will get there.

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Nick z

I like the updates on shares I trade. Updates from Bloomberg and Reuters plus industry updates and breaking news. I've had Matt Grice and James Abbott and found both to be excellent. I would like to continue a personal service with James. He understands how and which stocks I trade.

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Steve O

Excellent, knowledgable broker interaction and communication, coupled with very good research and analysis.

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William P

Being new to direct trading I needed help and was given all the time and advice that I needed to feel fully able to make decisions on what I wanted to invest in. I asked for and got exactly the type of info I required provided by Tom Cook, who I would recommend to anyone looking for help.

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Mr. W

I have been dealing with accendo for the past 8 years my broker Amrit I find him very helpful when he is there lol and had many offers to change but will not do it Bill Roberts

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Zoran N

Very good all round service! Timely market information. (charts + trends coverage ) On the ball accounts managers ,quickly available and alert . Part of my success owed to my personal manager Mr Sam Springet , than you.

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Mr Brian C

Easy to deal with.....

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Muhammed S

Accendo markets are great for trading cfds and their research is second to none! Aymen manages my account is extremely helpful and always keeps me updated on market info. Thanks again

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Mr Buta B

Always available, whenever I call I get straight through to someone that can and will help. The staff are very knowledgeable, helpful and easy to talk to.

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Stephen B

Aymen Azizi keeps an eye on what is happening in the market and informs me with timely relevancy, email call, and txt.

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