What Are Oil Futures And How Do They Work(3)

Assume an investor buys an oil future contract.

This means that the investor has committed to buying a fixed amount of oil at a fixed price at a defined future date.

If the price of oil rises between the time of the initial futures contract and the date of the sale, then the investor will make a profit.

Conversely, if the oil's future price is lower than on the date the futures contract was created, the investor will lose money.


By BIG Mike