Product Overview

What are WTI Crude Oil futures?

WTI Crude oil futures are the West Texas Intermediate, (WTI) or light sweet crude oil that is stored and distributed in Cushing, Oklahoma and has long been a benchmark for oil prices. 

Why would you want to trade WTI Crude Oil futures?

  1. Although Crude oil is often thought of as a commodity, it also has been considered a currency and economic barometer.
  2. Can be volatile, subject to swift price swings due to geopolitical, production and weather events.
  3. Allows traders to gain exposure in relatively straightforward manner compared to ETF counterparts.

How do you trade WTI Crude Oil futures?

Energy futures markets allow traders to hedge the risk they may carry in their equity portfolio or jump to opportunities triggered by economic, political or weather events.  

They offer instant exposure to the underlying commodity of your choice, whether it's crude oil, natural gas, gasoline or heating oil.

Ready to get started trading futures?  You'll need to open an account with a broker. Click Here to View a Broker List

Key Benefits

Gain the advantages of the Crude oil market but with a lower margin

LEADING WTI MARKET LIQUIDITY

Deep, liquid market that trades 920K contracts daily and has 2.17M in open interest, offering the depth to handle orders of any size.

NEARLY AROUND-THE-CLOCK ELECTRONIC ACCESS

Manage positions as global news and events that impact prices unfold.

60/40 US TAX TREATMENT

Get certainty of blended 60% long term/40% short term capital gains treatment.

CAPITAL EFFICIENCY

Control a larger notional value for a relatively small amount of money, enhancing your buying power.

MARGIN OFFSETS

Trading Micro WTI Crude Oil futures in the same marketplace as other NYMEX-listed energy contracts in your portfolio can reduce your overall margin requirements and help you save.

SAFETY AND SECURITY

Safety and security of central clearing in CME Group markets helps substantially mitigate your counterparty credit risk.

Explore Crude Oil futures in depth

Trading on Globex

One critical element to market liquidity is how tight or, in other words, how small the difference between the bid and offer is. For example, if CL is quoted at a minimum increment of (.01) in the nearest two expiring contract months ‒ it is an indication of efficient, tight markets. Keep in mind, there is no guarantee that the market will always be quoted at .01, and in times of tremendous volatility, it may be quoted wider than .01. WTI Crude Oil markets are available for trading on Globex nearly 24 hours a day, 6 days a week throughout U.S., European and Asian trading hours.

Contract expiration/roll

WTI Crude Oil is a physically delivered contract, which means that if a trader holds an open position through the last trading day for the contract month, they will be obligated to either make delivery (short positions) or take delivery (long positions) of 1,000 barrels of WTI Crude Oil per contract.

It is important to be aware of the dynamics involved in CL expirations. This includes being aware of the day the contract stops trading (as discussed above), the current supply/demand characteristics of the energy markets, and current storage capacity for crude oil ‒ among other factors.

A trader holding an open position in CL as last trading day approaches has three options. They can:

  1. Close their position by either buying or selling the number of contracts they are holding, leaving them without exposure to the price of crude oil.
  2. Roll their position to a deferred month. Typically, traders who want to maintain exposure to the price of crude oil will roll their position to the next expiring month. This is a common practice throughout all futures products and there is typically a very efficient, liquid spread market on CME Globex that enables market participants to roll positions in a cost-effective manner.
  3. Hold the position and make or take delivery of physical crude oil. This process can be very complicated and expensive for individual traders and is usually only undertaken by professional, commercial firms that have established procedures in place.

Delivery process

The delivery process in WTI Crude Oil does not begin until after the last trading day of the contract.

NYMEX Rulebook Chapter 200 describes the specific rules surrounding the delivery process for WTI Crude Oil. However, most individual traders will be prohibited from even entering into this process. Those holding positions in the nearest expiring month should be extremely cognizant of when the volume begins to move into the second month. Learn more.

Futures margin

In order to hold a futures positions, traders are required to post what we refer to as “margin” for each contract held. Unlike US equities, where trading “on margin” involves a loan from one’s broker (and associated interest payments), “margin" in futures is a performance bond or collateral held by the broker.

Currently, the margin requirement for one contract of CL is $4,750. If a trader holds one contract, they would be required to post that amount as collateral. If the position were to move against the trader, they would be required to post additional funds in order to maintain that amount. This is what is referred to as “mark to market”.

It is important to keep in mind that margin requirements can change as volatility in the market adjusts. CME Group will typically require higher margins as volatility increases. Additionally, brokerage firms may, at times, require higher margins than the Exchange.

Energy/oil market fundamentals

The price of WTI Crude Oil can be impacted by many different factors, and it is the global benchmark for one of the world’s most important commodities.

One of the reasons that WTI Crude Oil is a popular product to trade is the many different elements that can contribute to the price of oil including supply/demand, storage, currency fluctuation, geopolitical disruptions (particularly in the oil-producing Middle East), natural disasters, and more.

Because of the numerous factors that can impact the price of WTI Crude Oil, we recommend traders familiarize themselves with CME Group’s Event Analyzer which lists the different economic events and number releases that can affect the price level. Learn more.

Dynamic circuit breakers

Dynamic circuit breakers (DCBs) are similar to traditional circuit breakers but move with the market throughout the day. Within a specific time interval, DCBs define an upper and lower limit of how far an instrument is allowed to move in a specific time interval, usually an hour.

Each product has its own assigned value used to calculate the circuit breaker level, typically a percentage of its previous settlement price. CL’s dynamic circuit breaker is 15% and you can find more information on our DCB methodology here and here. You can download our DCB per product here.

Velocity logic

Velocity logic governs how far the price of a product can move within a very short period of time. Whereas price limits and DCBs look at price moves on a daily or hourly basis, velocity logic is a control designed to prevent market dislocation on a second by second, or even sub-second, time interval. Velocity logic events can cause a particular market to halt temporarily when a market reopens after a velocity logic event has been triggered, CME Group will restart the 60-minute window and calculate accordingly. Velocity logic uses a lookback window’s highest and lowest prices in the previous time interval. If CL’s lookback window consists of a high price = 42.17 and a low price = 42.13 and the velocity logic’s variance is 1.5, then the VL high bid = 43.67 and VL low bid = 40.63. You can learn more about velocity logic here.

Price banding

Price banding evaluates incoming orders to ensure that a single order is not filled outside of an acceptable range from the last price, either on the upside or downside. It is symmetrically applied to both the upside (for bids) and downside (for offers) to determine the price band variation range (PBVR). With each price change, the PBVR is recalculated and the new range is applied. The CME Globex platform rejects all bids and offers outside the PBVR. CL’s price band is .5 (found in the GCC Product Reference Sheet). If CL is trading at $42.15, then the effective price bands are: bid = $42.65 and ask = $41.65.

Contract Specifications


Contract Month

All

Trading Hours

5:00pm – 4:00pm (Sun–Fri) CT with a 60-minute break each day beginning at 4:00pm CT

Product

WTI Crude Oil

Contract Size

1,000 barrels

Trading Venue

CME offers electronic trading almost 24/6

Minimum Tick

$0.01 per barrel

Product Symbol

CL

Dollar Value of One Tick

$10.00 U.S. Dollars

Exchange Rulebook

NYMEX 200

Price Limit or Circuit

Price Limits

Settlement Method

Deliverable

Options Available

Quarterly, Monthly, Weekly

Termination of Trading

Trading terminates 3 business day prior to the 25th calendar day of the month prior to the contract month. If the 25th calendar day is not a business day

Contract Specifications


Product Name

WTI Crude Oil

Options Expirations

Monthly, Weekly

Options Symbol

Monthly - LO
Weekly - LO1-LO5

Trading Venue

Globex

Trading Hours

5:00pm – 4:00pm (Sun–Fri) CT with a 60-minute break each day beginning at 4:00pm CT

Type Of Expiration

American and European

Minimum Tick Size

$0.01 per barrel

WTI Crude Oil CL Price

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Last Trade as of CST. 10 Minutes Delayed Quote. Powered by CQG

Futures Calendar

21 SEP Last Trade
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23 SEP First Notice
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23 SEP Last Notice
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  • CRUDE OIL WTI TOOLKIT

    Interested in learning more about the world’s most liquid, actively traded crude oil contracts? Our toolkit, covers the key benefits, the contract specifications, and what every active trader needs to know about trading crude oil WTI futures and options.

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