|
Crude Oil Futures and Options Education
Crude oil futures and options quick facts:
-
1000 barrel contract
-
$1 move equals $1,000
-
Trades all months
Light Sweet Crude Oil
Futures Market Trading
Crude oil futures are the world's most actively traded
commodity, and the NYMEX Division light, sweet
crude oil futures
contract is the world's most liquid
forum for crude oil future
trading, as well as the world's largest-volume futures
contract trading on a physical commodity. Additional risk
management and trading opportunities are offered through
options on the crude oil future contract; crack spread
options on the pricing differential of
heating oil future contracts vs.
crude oil future contracts or
unleaded gasoline futures
contracts vs. crude oil futures. The NYMEX crude oil future
contract may be the most important energy future contract in
the world.
The crude oil futures contract trades in
units of 1,000 barrels, and the delivery point is Cushing,
Oklahoma, which is also accessible to the international spot
markets via pipelines. The crude oil future contract
provides for delivery of several grades of domestic and
internationally traded foreign crude oils, and serves the
diverse needs of the physical crude oil market.
During the September 11 terrorist attacks the NYMEX was
destroyed but within days the
crude oil futures and
crude oil options
markets were trading again. This is a testament to the
strength and viability of the energy future markets and the
commodity exchanges in the United States of America.
Light, sweet crude
oils are preferred by refiners because of their low sulfur
content and relatively high yields of high-value products
such as gasoline, diesel fuel, heating oil, and jet fuel.
The NYMEX Light sweet crude oil future contract is
considered by many the premiere oil future contract.
The e-miNYsm
crude oil future contract, designed for investment
portfolios, is the equivalent of 500 barrels of crude, 50%
of the size of a standard crude oil future contract.
The Brent blend
crude oil futures contract is based on a light, sweet North
Sea crude oil that serves as a benchmark grade and widely
trades as a differential to the NYMEX Division's bellwether
light, sweet crude oil futures
contract. Most of the crude oil is refined in Northwest
Europe, but significant volumes move to the U.S. Gulf and
East Coasts. Complementing the Brent crude oil future
contract are an options contract and an options contract on
the Brent/West Texas Intermediate-WTI crude oil futures
spread.
Contract Specifications
Light, Sweet Crude Oil
Future Contract
Trading
Unit
Crude Oil Futures: 1,000 U.S. barrels
(42,000 gallons).
Crude Oil Options: One NYMEX Division
light, sweet crude oil futures contract.
Price
Quotation
Crude Oil Futures and Options: Dollars
and cents per barrel.
Trading
Hours
Crude Oil Futures and Options: Open
outcry trading is conducted from 10:00 A.M. until 2:30 P.M.
After hours crude oil futures trading are
conducted via the NYMEX ACCESS® internet-based trading
platform beginning at 3:15 P.M. on Mondays through Thursdays
and concluding at 9:30 A.M. the following day. On Sundays,
the session begins at 7:00 P.M. All times are New York time.
Trading
Months
Crude Oil Futures: 30 consecutive
months plus long-dated crude oil futures initially listed
36, 48, 60, 72, and 84 months prior to delivery.
Additionally, crude oil futures trading
can be executed at an average differential to the previous
day's settlement prices for periods of two to 30 consecutive
months in a single transaction. These calendar strips are
executed during open outcry trading hours.
Crude oil options: 12 consecutive months,
plus three long-dated options at 18, 24, and 36 months out
on a June/December cycle.
Minimum
Price Fluctuation
Crude oil Futures and Options: $0.01
(1¢) per barrel ($10.00 per contract).
Maximum
Daily Price Fluctuation
Crude Oil Futures: $10.00 per barrel
($10,000 per contract) for all months. If any contract is
traded, bid, or offered at the limit for five minutes, crude
oil futures trading is halted for five minutes. When trading
resumes, the limit is expanded by $10.00 per barrel in
either direction. If another halt were triggered, the market
would continue to be expanded by $10.00 per barrel in either
direction after each successive five-minute trading halt.
There will be no maximum price fluctuation limits during any
one trading session.
Crude oil options: No price limits.
Last
Trading Day
Crude Oil Futures: Trading terminates
at the close of business on the third business day prior to
the 25th calendar day of the month proceeding the delivery
month. If the 25th calendar day of the month is a
non-business day, crude oil futures trading shall cease on
the third business day prior to the last business day
proceeding the 25th calendar day.
Crude oil options: Trading ends three
business days before the underlying futures contract.
Options
Strike Prices
Twenty strike prices in increments of
$0.50 (50¢) per barrel above and below the at-the-money
strike price, and the next ten strike prices in increments
of $2.50 above the highest and below the lowest existing
strike prices for a total of at least 61 strike prices. The
at-the-money strike price is nearest to the previous day's
close of the underlying futures contract. Strike price
boundaries are adjusted according to the crude oil futures
price movements.
Margin
Requirements
Margins are required for open crude
oil futures or short options positions. The margin
requirement for an options purchaser will never exceed the
premium.
Trading
Symbol
Futures: CL
|
