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Are Oil ETFs the Smarter Alternative?

Oil investments can be found in most diversified portfolios. Oil exchange-traded funds offer affordable alternatives to the actual ownership of oil fields.

by Orit Nathan Mahalal

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Binary options on oil ETFs offer easy access to oil investments!

There are many avenues for adding oil to your investment portfolio. One route is binary options trading on oil exchange traded funds, commonly termed an Oil ETF. For the everyday trader looking to diversify a portfolio with the inclusion of oil, an ETF presents a real time interest in the oil commodity without the costly purchase of the product.

Oil Commodity ETFs

Oil is a prime trading commodity. Supply and demand substantially determine the price of oil at any given moment. Oil exchange traded funds are commodities mutual funds that track the price of oil and establish the ETF price through a variety of factors, similar to the workings of indices. The ETF merges oil futures, oil company stocks and oil indices. Online brokers offer binary options transactions on oil exchange traded funds.

Placing a minimum buy/sell order on a short-term binary option, or projecting an upward or downward direction in the price of oil ETFs offer affordable options for profiting from the oil industry. Included in the general and monetary benefits of purchasing binary options on oil ETFs are ease of trading, the limited timeframe, and lower fees compared to many other instruments. Other benefits include transparent terms such as a predetermined financial return on each trade, as well as the overall affordability of each transaction. Let’s take a look at each factor.

  • Ease of Trading – Binary options trading on oil ETFs provides the opportunity to open a transaction with just a few clicks. Traders can enter a potentially lucrative market with ease through online brokerages.
  • Limited Timeframe – Investors have complete control over the time period of the trade, from open to close. The timeframe may include mere minutes; hours; or less often, days, weeks or months. The shorter timeframe gives traders greater flexibility and more effective control over their financial affairs. Quick returns are a significant benefit of binary options trading. Further, with the shorter period of minutes or hours, there is increased success in projecting the ongoing nature of trends.
  • Diminished fees – As compared to land brokers, the fees and commissions at online sites are significantly less due to increased competition and streamlined services.
  • Transparent Terms – Every binary option trade on oil ETFs will include a clear statement as to the specific predetermined return on transactions. The exact fee structure and any commission that is charged will be clearly listed.
  • Affordable Investments – Binary options trades are affordable for most every trader. The educational tools provided at most online brokerages serve to rapidly increase trading know-how and comfort. With increased knowledge of the oil ETF market, binary options traders are able to optimize their profit potential.

Trader Essentials

There is no substitute for studying the ins and outs of oil ETFs. Most online brokers provide charts of recent and current fund price activity. Traders are encouraged to look for ongoing trends as well as thresholds of reversals. It behooves traders to be aware of the state of global economic conditions. A downturn in the global marketplace would be expected to cause a plummeting effect on the price of oil. Traders are encouraged to familiarize themselves with the current performance of the oil market. The more you know, the greater the comfort, confidence and overall success you will find in binary options trading on oil ETFs.

Retain all financial data regarding each and every trade. This is imperative for tracking your profit and loss over a period of time, maximizing your control over the financial outlays and gains from investments. Earnings are taxable. In the U.S., to greatly diminish the stress of IRS audits, be prepared with receipts and online printouts of every aspect of your options transactions. You are the only person in control of your finances. Make sure that your investments do not overshadow the payment of household expenses. By not superseding your monetary limitations, you will enhance the enjoyment inherent in each trade.

Current Trend in the Price of Oil

The ongoing trend in the global economy is upward. The world appears to be slowly digging itself out from under the 2008 financial crisis. This upward trend has translated into increased demand for commodities such as oil, creating an ongoing rise in the price of oil. That rise plays a substantial role in the determination of the price established by oil exchange-traded funds.

*This post was published according to the "Contributed Article Terms and Conditions"

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