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Heating Oil 
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Heating Oil (Physical) futures are an outright heating oil contract between a buyer and a seller. The contract:

  • Is based on what is also known as No. 2 fuel oil, which accounts for about ¼ of the yield of a barrel of crude, the second largest "cut" after gasoline
  • Is used to hedge diesel fuel and jet fuel, both of which trade in the cash market at an often stable premium to heating oil futures

Things to know:

  • Traded via open outcry and electronically on CME Globex
  • Based on delivery in New York harbor, the principal cash market trading center
  • Option types:  calendar spread, crack spread, and average price
  • Trading at settlement is available for the front two months except on the last trading day and is subject to the existing TAS rules