For many active traders Crude oil can be an excellent market to day trade
Here are some of the key reasons why you may want to consider Crude Oil as your preferred day trading market.
Average trading volumes are approximately 300,000 contracts per day
Crude oil is considered to be a liquid trading market, but not as liquid as others such as the eMini SP
Traders should know that slippage, getting filled at a price other that the desired price is a more likely in less liquid markets. Traders should be prepared to experience some degree of slippage in this market
Perhaps the greatest reason to trade crude oil, is the intraday volatility. Volatility is the measure of distance (in either direction) that a market will move over a given period of time. Therefore markets with higher volatility are preferred by day traders
The point value for the symbol CL, crude oil is $100 and it trades in increments of 1/100. That means that the smallest price move is $.01 and has a dollar value of $10
For each 1 cent move in the price of the contract the dollar value will change by $10
Regular session or what can also be referred to as Pit Session hours are from 9:00 am to 2:30 pm est.
Extended trading hours are 23.25 hours with a 45-minute break each day beginning at 5:15 p.m. (4:15 p.m. CT)
Broker Required Margins
while margins on crude oil are not as low as on the eMini SP brokers do still offer very generous margins in the neighbourhood of $3,000 per contract traded.
With the total value of the contract being Contract x Point Value, example 99.50 x 1,000 = $99,500
A $3,000 margin requirement represents approximately 3% of the value of the contract
Category: Day Trading