Buying Crude Oil

If you buy crude oil at $25 a barrel and sell crude oil at $30 a barrel you will make a profit of $5 per barrel. If you buy crude oil at $25 and sell crude oil at $20 you will suffer a loss of $5 per barrel. The total profit or loss will depend upon how many barrels you buy and how many barrels you sell. If you buy and sell only one barrel, you will make or lose $5. If you buy and sell one thousand barrels, you will make or lose $5,000.

Buying shares of stock at $25 and selling shares of stock at $30 or buying shares of stock at $25 and selling shares of stock at $20 would result in the same $5 profit or $5 loss share of stock. In this sense, there is no difference between trading in futures and trading in stocks.