QM VS CL - Crude Oil

Discussion in 'Commodity Futures' started by hanzahar, Aug 16, 2008.

  1. Hi,

    I've never traded energies before...

    on the nymex website it confuses me...

    it says QM is a mini contract for CL but why is QM $12.50 a tick while CL is $10.00 a tick?

    also CL requires more margin then QM...

    I'm familiar with index futures like YM and I understand how it works but on nymex contract it confuses me...

    how about volume? I think the nymex website pretty sucks...no?

    :confused: :confused: :confused:
  2. CL is big contract, so $1.00 movement on price of oil = $1000, therefore each tick is worth $10.00, with 100 ticks per $1 (ie, 1 cent increments)

    QM is the mini, $1.00 on oil being worth $500, there being only 40 ticks per $1.00 so each tick moves in 2.5c increments worth $12.50 each

    You require more margin for the big contract because you're more likely to lose more money.
  3. ermm well ok but I still confuse why $12.50 a tick

    I'm looking for small tick value :confused:

    say the YM it's $5 a tick and there a $10 a tick DJIA futures...

    I thought the mini means a smaller tick size...

    what do you recommend for a newbie to scalp the oil market...i mean the contract...
  4. Jachyra


    The fact that its a "mini" contract means that the total contract value is worth a fraction of the size of the regular contract... in this case 1/2 as large since the full contract represents a transaction of 1,000 barrels and the mini is for 500 barrels.

    In regards to which oil contract is best for a newbie scalper... I'd have to vote for none of the them! Energy markets in general are tough especially for newbies.
  5. Surdo


    DO NOT trade Crude oil if you are asking these questions, you will, I repeat, will lose all of your money!

    Find an ETF and trade 100 lots.

    Currency futures are a bit tamer and generally trade with crude.

    One lots in EC won't kill you as fast, there is even a mini, with poor liquidity to learn futures markets.

    CL/QM is not meant to cut your teeth on!
  6. It's not about the tick It's about the total dollar value.

    Pretend crude is at $112.00

    If it goes to $112.10,

    for CL, that is 10 ticks ($100) = 112.01, 112.02, 112.03,...

    For QM, that's only 4 ticks ($50) = 112.025, 112.05, 112.075, 112.10

    So you see the difference? If you still don't, I suggest do not even trade it.

  7. Surdo


    If you are long CL @ $113 it goes to $114, you made $1000, on 100 ticks, that's $10/tick!

    If you are long QM@ $113 it goes to $114, you made $500, on 40 ticks, that's $12.50/tick!

    Please tell me this is clear to you?

    Do a simulator trade and watch how fast CL moves, and then report back what you think!

    good trading,

    el surdo
  8. yea i got you thanks...

    still don't get it why they called it mini...perhaps it only applies to oil industry people not traders as $12.50 is not a mini of $10...$5 is :confused:
  9. its mini because $1000 per full point is twice as big as QM at $500 per full point.

    Its nothing to do with tick value.
  10. Surdo


    "Oil industry" people are not trading QM mini me!

    Perhaps you could set up a meeting with a NYMEX executive and suggest they rename the contract to your liking?
    #10     Aug 16, 2008