Oil

Crude Oil

The energy industry is one of those industries that receive the most capital inflows and therefore oil trading has become a popular way of financial investment. By spread contracts, investors can make a profit, when commodity prices rapidly changes. During the time, markets will do hedging against currency devaluation.

Crude Oil — Contract Details

Trading Code USOUSD
Standard Trading Contracts 1,000 buckets
Spread USD 0.05
Minimum Price Volatility USD 0.01
Value of each point USD 10
Trading Lot (Minimum/Maximum) 0.01 lot / 20 lots
Margin Percentage (Reserve) USD 1500/lot
Commission N/A

Example of Crude Oil Trading

Open Position Close Position Profit/Loss (USD)
Buy (Long) Buy 1 lot at USD 43 Close at USD 45 Earn 200 pips
Profit: USD 2,000
Open Position Close Position Profit/Loss (USD)
Sell (Short) Sell 1 lot at USD 45 Close at USD 43 Earn 200 pips
Profit: USD 2,000

Crude Oil Local Global
Trading Lot 10 tons per lot 1000 buckets, which is equal to 15.9 tons per lot
Trading Hours Summer Time: 07:00 a.m. – 05:15 a.m. next day (excluding settling time, national legal holidays, and closed days in the international market.)
Winter Time: 08:00 a.m. – 06:15 a.m. next day
24 hours non-stop trading
Beijing Time 06:00 a.m. – 05:00 a.m. next day (from Monday to Friday). The time of opening and closing may be adjusted according to Summer Time.
Trading Spread 6 pips 5 pips
Trading charge Unilateral 6/10000 (bilateral charge) N/A
Carry trade interest charge Interest should be paid in setting up positions Interest should be paid when setting up positions; interest can be gained in short-selling
Trading Margin 20% 1500USD/lot
Minimum Invest RMB 50,000 USD 2,000
Example

Trading Type: Qianhai Oil 10

Operation: buy a lot at RMB 2,300, close the position when the price raise 5% to RMB 2,415, and the client will make a profit as follows:

Amount Invested: 10 tons * 2300 * 20% = RMB 4,600

Profit Pips: 2415-2300=115

Fee of Opening/Closing the Position: 0.06% in opening and closing the position respectively = 2.8 points

Net Profit Pips: 115-2.8=112.2

Earnings: 112.2*10 = RMB 1122

Rate of Return: 1122/4600*100% =24.3%

Trading Type: TeleTrade US Crude Oil

Operation: buy 0.5 unit at USD 50, close the position when the price raise 5% to USD 52.5, and the client will make a profit as follows:

Amount Invested: USD 750 = about RMB 4,650

Fee of Opening/Closing the Position: N/A

Net Profit Pips: (52.5 – 50.00)= 250

Earnings: 250 * 10 * 0.5 unit = USD 1,250 (about RMB 7,750)

Rate of Return: 7750/4650*100% =166.6%

Conclusion It is obvious that US Crude Oil trading has a higher return than Local Qianhai Oil; US Crude Oil trading is flexible (minimum position just 0.01 lot) and no trading fee and commission is needed in open and close position.