Unlike the commodities, oil has some peculiarities as it trades predominantly over the exchanges and there is not a liquid continuous spot market.Trading in OIL: It is OTC (Over the Counter) trading which means that the transaction is performed directly between the two parties involved – the buyer and the seller. There is no third party involved, like in an exchange market. The acronym for oil is OIL. It is measured in barrels but as it is cash settled (non-delivery trading) the physical purchase or sale of the commodity is not actually performed. Also known as Texas Light Sweet, WTI is a type of crude oil used as a benchmark in oil pricing and the underlying commodity of the New York Mercantile Exchange’s (NYMEX) oil futures contracts. The OIL trader will open, modify and close deals on the Forex platform in the same way they do with a currency day trade.

Quote convention: OIL will be quoted with OIL as the base – Example OIL/USD = 118.00 USD per barrel

Expiration date: Oil trading can only be renewed up to the close of business on the fourth US business day prior to the 25th calendar day of the month, preceding the contract month. If the 25th day is a non-business day, trading shall cease on the fourth business day prior to the business day preceding the 25th calendar day.

Trading hours: 01.30 London time until 22:30 London time. Outside these hours no opening or closing of deals will be allowed.

Availability: Oil trading is not available in USA and some other regions.

If you wish to get involved in the Forex market, open an account, for free.

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