Educate me on energy futures

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  1. #1
    Capital's Avatar
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    Default Educate me on energy futures

    What do ya'll know?
    Last edited by Capital; 08-08-2013 at 06:48 PM.

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    I've been interested in learning more about futures lately to diversify my investments. Look forward to seeing others inputs even though this section has kind of died down as of lately

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    Capital's Avatar
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    No one?

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    May be narrow the topic?


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    What do you want to know? I trade futures for a living. Mainly emini s&p's, but crude oil is a secondary market for me.

    What are your questions?
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    What are your main resources for information? How do you view futures compared to stocks?

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    For the average guy, its a lot easier and more efficient to trade ETFs. Granted I work for an ETF company but its still easier.

    Two things to know 100% before you start:
    1 - Contango vs. Backwardation & how steep that curve is
    2 - The DOE reports, oil on Wednesdays & Nat Gas on Thursdays

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    Quote Originally Posted by Capital View Post
    What are your main resources for information? How do you view futures compared to stocks?
    What is your style of trading? Duration of hold? The only real information that you need to access is EIA and other inventory releases. You need to be aware.

    As far as my own style of trading, it is mostly technical and market profile, so news/fundamentals are secondary and I'll typically only use "information" to confirm or deny my bias.


    Quote Originally Posted by Mburr View Post
    For the average guy, its a lot easier and more efficient to trade ETFs. Granted I work for an ETF company but its still easier.

    Two things to know 100% before you start:
    1 - Contango vs. Backwardation & how steep that curve is
    2 - The DOE reports, oil on Wednesdays & Nat Gas on Thursdays
    I really have to disagree with this. For one thing, the futures market is open almost the entire day and night. 23 hours minus the small halts.

    There is no "easier" when it simply comes to execution. You make the same buy or sell order and liquidity in the futures market is better. IE: Some news breaks out of China during the overnight session and you are actually able to enter or exit a position where you will be locked into an ETF until pre-market trading or regular hours the following morning.

    All ETFs are destined to go to 0. That is unarguable. Will it happen? Who knows. They can just reverse split and keep selling clients garbage.

    MOST importantly, the favorable taxation of futures vs etfs. Futures are taxed at a 60/40 split. Meaning that 60% of your profits are taxed at a long term tax rate, and 40% of your profits taxed at a short term rate. If your holding periods are shorter which I am assuming they are, then you are at a tax advantage.

    Also lets not forget to mention cheaper commissions for the most part. A good retail broker like Interactive Brokers will get you $2 commissions each way per crude oil contract that is worth $105,000. Each ETF trade you're executing will cost you more money whether you're trading with a broker that charges you based on your size or if it is a flat 7-10 dollars per trade.
    Des Jr. likes this.

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