NYMEX West Texas Intermediate (WTI) crude oil futures are the most liquid oil contract in the world and are considered a world benchmark in the price of oil. At 1/10 of the size of the standard-size contract, micro-crude futures (MCLs) provide traders at all levels with an efficient and cost-effective way to gain exposure to the crude oil market.
Learn about the benefits of micro-crude futures in this 2-minute video.
More precise trade management
The smaller size of the micro crude futures contract means more accurate business management. At 1/10 the size of the WTI benchmark futures contract, Micro WTI crude oil futures offer the same robust transparency and price discovery as the larger contract, but with lower margin requirements, such as only $ 100 with NinjaTrader Brokerage.
Crude oil trade with leverage and great liquidity
Like the standard crude oil futures contract, crude oil futures are very leveraged and provide a powerful way to increase capital efficiency. The notional unit for the modest micro crude contract is 100 barrels.
Both standard and micro crude futures are deep markets, which do not provide a lack of liquidity. About 1.2 million contracts are negotiated daily with more than 2 million in open interest. This liquidity means you can easily get in and out of micro crude operations.
Close draws in the spot market with tax advantages
WTI crude oil futures are physically settled and are closely connected to the spot market, which gets the contract on the condition of “preferable” measurement for world oil prices. As an added benefit, oil futures traders are eligible for the 60/40 tax rule, allowing them to claim capital gains at a much lower rate than stocks or ETFs.
The chart above, created for FREE usingTA using NinjaTrader, shows the price action on oil futures during the previous months. Moving averages show the recent upward trend of futures on crude oil. Represented below the price action, you can see the popularity of crude futures by the volume traded per bar.
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