What is a crude oil futures contract?

Crude oil futures contracts allow crude to be bought and sold for delivery at specific dates in the future, allowing market participants to lock in a price today for the future delivery of a barrel of oil. One of the roles of futures markets is price discovery, or price determination in a marketplace of buyers and sellers.

When does crude oil expire?

For crude oil, each contract expires on the third business day prior to the 25th calendar day of the month preceding the delivery month. If the 25th calendar day of the month is a non-business day, trading ceases on the third business day prior to the business day preceding the 25th calendar day.

What is an example of a CME crude oil futures contract?

For example, a trader might buy a CME Crude Oil futures contract (CL) at $63 with a July expiration. A trader buys 1,000 barrels of oil for $63 per barrel when the contract expires in July. The seller gives the buyer 1,000 barrels of oil for $63 per barrel at that time, no matter the market price.

Are there price limits on micro WTI crude oil futures?

Micro WTI Crude Oil futures have dynamic price fluctuation limits (circuit breakers) just like their standard-sized counterparts. Daily price limits for these products can be found here . 13. Will there be options on Micro WTI Crude Oil futures?