Oil trading is round the clock market, which constantly changes. Many supply and demand factors also affect energy prices, and global economic growth has the biggest influence. Whenever economic growth looms, demand for energies grows as well. Energy trading means buying and selling energy power between participants in the energy industry. The forms of trading can be different, depending on the market itself and the term of trading.
Energy derivatives represent the financial instruments with assets being energy products including oil, natural gas, and electricity. Traders trade on an exchange or over-the-counter. In the trading society, energy derivatives exist in the form of options, futures, or swap agreements. The value of a derivative fluctuates according to the changes in the price of the underlying energy product.
Besides, energy companies can also use derivatives to hedge against foreign exchange risks and interest rate risks. Derivatives play an important role in the energy market helping to reduce risk, providing all parties with the price certainty needed to plan business operations.
The crude oil market represents great trading liquidity allowing traders to trade on both the long and short sides. In other words, there are opportunities to trade without paying attention to price changes. Crude oil is also regarded as a very volatile commodity changing drastically due to political or environmental circumstances. NeoTrade offers its customers supreme conditions to trade crude oil. Check on, and become a major energy trader.