Spread Bet on Brent Crude Oil Commodities Online Spread Betting
The Brent Crude Oil price had been dropping since it the price reached a high of $78.12 dollars per barrel on 1 August. Then since 8 August the price has been fairly steady. Today it hit a high of $71.90 and a low of $69.03 before closing at $69.73.
Falling financial markets will often hit the Crude Oil price and the forecast of low consumer spending will also hit demand. However the price may have levelled out again as Mother Nature rears her ugly head. Two tropical storms, one heading to Gulf of Mexico and one already there have suggested there could be supply problems. The Gulf produces around a 30% of US oil and hosts the majority of the US refinery capacity.
With one of the storms threatening to become a hurricane it may be worth having a look at the Brent Crude Oil or the US Crude Oil Markets.
At the time of publication the Brent Crude Oil (Oct) price is around $72.81 – $72.86.
As with many financial markets, spreadbettors can speculate on the future value of commodities. eg spread betting commodities like Brent Crude Oil to increase to more than $72.86 by 13-Sep-07.
For the Brent Crude Oil market, you trade in $X per point, where a point is 0.01 of Brent Crude Oil movement. eg if your stake was $20 per point and the Brent Crude Oil moves 0.04 in price then that would be an $80 difference to your profits.
Example
So looking at an example, let’s say you see the live price on FinancialSpreads.com and it shows a spread of $72.81 – $72.86 and you think that the Brent Crude Oil (Oct) value will go up to more than $72.86.
Therefore you buy at $72.86 for a stake of $10 per point.
And so let’s say that by the end date of 13-Sep-07 your Crude Oil spread bet settles at $72.98.
Then your profit/loss is calculated by taking the difference between the level the trade closed at, ie $72.98 and the value you bought the market at, ie $72.86 and then multiplying that by the stake per point of movement.
P&L = (($72.98 – $72.86) / 0.01) x $10 per point stake.
= (0.12 / 0.01) x $10 per point stake.
= $120 profit.
Nevertheless if the market didn’t move as expected and had the Brent Crude Oil (Oct) price closed at $72.80 then you would have lost on your investment.
Loss = (($72.80 – $72.86) / 0.01) x $10 per point stake.
= (-0.06 / 0.01) x $10 per point stake.
= -$60 loss.
Looking for more spread betting examples?
Look no further…How to spread bet on Commodities
Good luck! DB
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