Everybody knows that the price of oil tends to rise and fall over time. It used to be that only connected traders were able to take advantage of this and make money when oil prices moved, but today almost anyone can trade oil. Imagine instead of being annoyed at gas prices rises, if instead you were secretly smiling because you were making money as the price of oil increased (of course, you'd still have to pay more at the pump for gas, but it's ok because you're still making money anyway).
As automobiles and certain types of technology become more prevalent, the demand for oil has been going up amongst consumers. And as you may expect, when demand goes up, so does price, and in this case it causes the price of oil to rise.
Deep discount brokerages and online futures brokerages have made trading oil something that is easily accessible to almost anyone with an internet connection. The two most common ways to trade oil are with oil futures and oil ETFs, which will be explained here.
Futures trade basically the same as stocks, but the main difference is that every few months they expire and a new contract takes its place. For the most part, it's not really a big deal. The reason for this is because long in the past, a futures contract was actually the right to buy oil (or whatever commodity the futures contract was for), but today it's not really that literal; no one who trades futures actually expects to have barrels of oil delivered to their front door when the contract expires. In fact, nearly every futures broker will automatically "roll over" or sell a contract for you when it expires. Other than that different, the general premise of futures is the same as stocks: the goal is to buy and sell for profit.
There is also a stock ETF (Exchange Traded Fund) for oil prices that can be traded, bought, and sold just like any other stock. Its ticker symbol is USO. You can buy this through any stock brokerage and sell it whenever you want. Since it's a stock, there is no expiration or rollover like there is with futures.
If you study your economic news and pay attention to what's going on in the world, you may very well profit from trading oil prices.
As automobiles and certain types of technology become more prevalent, the demand for oil has been going up amongst consumers. And as you may expect, when demand goes up, so does price, and in this case it causes the price of oil to rise.
Deep discount brokerages and online futures brokerages have made trading oil something that is easily accessible to almost anyone with an internet connection. The two most common ways to trade oil are with oil futures and oil ETFs, which will be explained here.
Futures trade basically the same as stocks, but the main difference is that every few months they expire and a new contract takes its place. For the most part, it's not really a big deal. The reason for this is because long in the past, a futures contract was actually the right to buy oil (or whatever commodity the futures contract was for), but today it's not really that literal; no one who trades futures actually expects to have barrels of oil delivered to their front door when the contract expires. In fact, nearly every futures broker will automatically "roll over" or sell a contract for you when it expires. Other than that different, the general premise of futures is the same as stocks: the goal is to buy and sell for profit.
There is also a stock ETF (Exchange Traded Fund) for oil prices that can be traded, bought, and sold just like any other stock. Its ticker symbol is USO. You can buy this through any stock brokerage and sell it whenever you want. Since it's a stock, there is no expiration or rollover like there is with futures.
If you study your economic news and pay attention to what's going on in the world, you may very well profit from trading oil prices.
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