Micro Crude Oil futures from the CME Group provide an ideal opportunity for you to experience the benefits of oil futures trading at a reduced cost. With a smaller contract size, more traders can now take advantage of the leverage and liquidity of one of the largest commodity markets.
Watch this short video to learn more about the benefits of trading Micro Crude Oil futures.
Lower Financial Commitment
At 1/10 the size of the standard contract, the financial commitment to trade Micro crude oil futures is greatly reduced.
While full-sized crude oil futures have a contact value $10 per tick and $1000 per point, micro crude oil futures have a $1 tick value and $100 point value.
Increased Flexibility
Given their smaller size, Micro Crude Oil futures offer more granularity and smaller margin requirements. For example, you can now trade 5 Micro Crude Oil contracts, which would amount to 1/2 the contract size of the standard Crude Oil (CL) future. This allows you to start small and increase your trade volume as you gain experience.
Round-the-Clock Trading
While stocks or ETFs offer limited trading hours, Micro Crude Oil trade 23 hours a day, 6 days a week. This provides more futures trading opportunities throughout the day.
Highly Leveraged Investment
As with other futures contracts, Micro Crude Oil is a highly leveraged investment. Through the use of margin, you can control a large contract value with a smaller amount of capital.
Please note: Financial leverage can result in losses greater than the initial margin, and traders should take appropriate measures to minimize risk when trading unpredictable markets.
Tax Advantages
Additionally, trading Micro Crude Oil Futures can offer substantial tax benefits when compared to other asset classes such as ETF’s or stocks.
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Source: https://ninjatrader.com/blog/5-reasons-to-trade-micro-crude-oil-futures/
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