How to short crude oil and make money

How to short crude oil and make money or turn a profit. If ever a financial instrument ever seemed to be taunting the markets, the crude oil contract is it. A brief pullback to around $73 a barrel early last week fooled a few investors into thinking perhaps oil’s peak had passed.

As an asset, crude oil garners a bit more respect than the average internet stock or biotechnology play, if only because investors know all-too-well how demand is driving prices for oil and its products. The crude oil market has become a financial instrument comparable to gold, comparable to the currency markets.

So, how can you short crude oil and make money at the same time?

If you buy a single oil futures contract, every cent the oil price moves costs or gains you $10 US. That is each “pip” is $10.

In trading there are stops and limits. A stop is an automated trade to stop you from losing money, that is if the market goes against you. A limit is an automated trade that takes your profit if the market goes with you.