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How do I buy crude oil?

All can be purchased through an online brokerage account or a full-service broker. Crude oil is a volatile commodity essential to global transportation and manufacturing. Investors can speculate on the price of crude by trading oil futures and options, related ETFs and ETNs and energy stocks, directly or through ETFs and mutual funds.

Is the futures market a good way to trade crude oil?

The futures market is the most direct way to trade crude oil, but it’s not practical for most investors. As is the case with all derivatives —investment contracts that derive their value from an underlying asset— brokers will require futures traders to pay a “margin” up front, or a certain percentage of the value of the trade.

What is a crude oil futures contract?

The futures market is the primary market for trading crude oil, and one futures contract represents 1,000 barrels. As with other commodities that trade in the futures market, there are contracts for different months that dictate delivery.

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