To trade crude oil futures, you open an account with a futures brokerage, fund it with enough cash to meet exchange margin (roughly $6,400 to $6,800 per standard WTI contract at recent exchange levels, and more once your broker’s cushion is added), choose a contract month, and place a buy or sell order for the ticker CL or the smaller MCL. The trade itself takes seconds. The parts that catch new traders are margin calls, contract expiration, and the tax rules, so most of what follows is about those.
What You’re Actually Buying or Selling
The North American benchmark is West Texas Intermediate, or WTI, and it trades on the New York Mercantile Exchange under CME Group. A standard WTI contract represents 1,000 barrels of light sweet crude oil, priced in U.S. dollars and cents per barrel.1CME Group. Crude Oil Futures Contract Specs The minimum price movement is $0.01 per barrel, which equals $10.00 per standard contract. A $1.00 move in the price of oil is therefore $1,000 gained or lost on one contract. That math is what makes position sizing the first real skill.
If a standard contract is too much exposure, CME Group offers an E-mini at 500 barrels and a Micro WTI (symbol MCL) at 100 barrels. On the Micro, a one-cent tick is $1.00 instead of $10.00.2CME Group. Micro WTI Crude Oil Futures Contract Specs All three sizes track the same underlying benchmark. Most new traders start on Micros for that reason.
Contract symbols use a letter for the month and a number for the year. January is F, February G, March H, and December Z. December 2026 WTI shows up as CLZ6 on your platform; Micros use the same codes on MCL.1CME Group. Crude Oil Futures Contract Specs
WTI futures trade almost continuously on CME Globex, from Sunday 5:00 p.m. Central through Friday 4:00 p.m. Central, with a 60-minute daily break at 4:00 p.m. CT.1CME Group. Crude Oil Futures Contract Specs Volume is heaviest during roughly 9:00 a.m. to 2:30 p.m. Eastern, when the physical oil market is most active. Overnight sessions are tradable but spreads widen and moves get choppier.
The Account You Need
A regular stock brokerage account will not work. Futures trading requires a separate account with a futures commission merchant (FCM), or a broker that clears through one. These accounts fall under the Commodity Exchange Act, which governs how the firm handles your orders and separates your funds from its own capital.3Office of the Law Revision Counsel. 7 USC Ch 1 – Commodity Exchanges
Two federal bodies oversee the market. The Commodity Futures Trading Commission (CFTC) regulates it broadly, and the National Futures Association (NFA) handles registration, audits, and disputes as the industry’s self-regulatory body.3Office of the Law Revision Counsel. 7 USC Ch 1 – Commodity Exchanges Any firm you consider should be registered with both.
Two things will surprise you if you’re coming from equities. First, the Securities Investor Protection Corporation does not cover futures accounts; SIPC excludes commodity futures from its definition of a security.4SIPC. What SIPC Protects Your protection instead comes from segregation rules requiring FCMs to hold customer funds in separately identified accounts sufficient to cover all customer obligations at all times.5eCFR. 17 CFR 1.20 – Futures Customer Funds to Be Segregated and Separately Accounted For That is not insurance. Picking a well-capitalized, NFA-registered FCM matters.
Second, FINRA’s pattern day trader rule and its $25,000 equity threshold apply to securities accounts, not futures.6FINRA. Day Trading You can day trade crude oil futures as often as you like with a much smaller account. Your only real constraint is margin.
Margin and Margin Calls
Opening a futures position requires a margin deposit, sometimes called a performance bond. It is not a loan or a down payment. It is cash held by the exchange’s clearinghouse as a guarantee that you can cover potential losses. The amount changes with market volatility.
As of early 2026, the CME exchange-level maintenance margin for a standard WTI contract runs about $6,400 to $6,800, depending on the contract month.7CME Group. Crude Oil Futures Margins Your brokerage will usually require a higher initial margin, often 10% or more above the exchange level, and some brokers stack on a larger cushion. In practice, initial margin for one standard contract often runs $7,000 to $10,000 or more.8CME Group. Product Margins Micro contracts require proportionally less. Check your own broker’s numbers before placing a trade.
If your account equity falls below the maintenance level, you get a margin call and must deposit funds immediately. Miss the call and the clearing firm can liquidate your position without warning, at whatever price the market is at when the firm acts. That is the single most common way new futures traders take outsized losses. Size positions with the assumption you will be wrong sometimes.
Placing and Closing a Trade
Once the account is funded and the platform is open, the mechanics are simple. Enter the ticker and month code for the contract you want (say, CLZ6). Look at the current price, the bid-ask spread, and the volume to confirm the contract is actively trading. Enter your quantity. Click buy to go long and profit if the price rises; click sell to go short and profit if it falls. Once the order fills, the position sits on your dashboard with a running unrealized P&L that updates every tick.
To close, you place an offsetting trade in the same contract month: sell two if you bought two, buy one if you sold one. The difference between entry and exit, times $10 per tick for a standard contract or $1 for a Micro, is your realized profit or loss. Most platforms have a close-position button that builds the offsetting order for you, which avoids the mistake of selecting the wrong month or quantity. Until you place the offset, the position stays open and stays exposed.
Order types are the same ones you use in equities. Market orders fill immediately at the best available price. Limit orders fill only at your specified price or better. Stop orders trigger a market order when the price is reached and are mostly used to cap losses. Stop-limit and trailing stop variants exist on most platforms.
Expiration, Delivery, and Rolling
Every crude oil futures contract has an expiration date. For WTI, trading ceases several business days before the 25th calendar day of the month preceding the contract month.9CME Group. Crude Oil Futures Calendar Hold a long position past that point and you could be obligated to take physical delivery of 1,000 barrels of oil at Cushing, Oklahoma. Hold a short and you could be required to deliver. Neither is something a retail trader wants.
Brokerages set their own earlier cutoffs, usually several days before the exchange’s last trading day, to keep retail customers out of the delivery process. Miss the broker’s cutoff and you can face forced liquidation and administrative fees. Know the expiration date of any contract you hold, and put the broker’s earlier cutoff on your calendar.
If you want to keep exposure past expiration, you roll the contract: close the expiring month and simultaneously open the next month. Rolling is not free. The next month’s price is almost never identical to the current month. In contango, when later-dated contracts are priced higher than near-term ones, rolling a long position sells cheap and buys expensive, costing you. In backwardation, the opposite, rolling helps the long holder. Crude oil spends long stretches in contango, and the cumulative cost of rolling can materially drag on a buy-and-hold long position over months or years.
Costs and Fees
Several layers of fees attach to each trade:
- Exchange and clearing fees from CME Group, which vary by product, volume, and membership status. Non-member retail traders pay the highest tier.10CME Group. Clearing and Trading Fees
- An NFA assessment fee of $0.02 per side on every futures trade, regardless of contract size.11National Futures Association. NFA Assessment Fees FAQs
- Broker commissions, typically a few cents to a couple of dollars per contract side at discount futures brokers, depending on account size and volume.
- Platform and market data fees. Basic platforms are often free; advanced charting, depth-of-book, or real-time order flow can run $30 to $100 or more per month, plus exchange data fees.
None of these are large in isolation. Active traders should still add them up across a typical month before deciding what trading frequency actually makes money.
Taxes: Section 1256 Treatment
Futures traded on U.S. exchanges get a different tax treatment than stocks, and usually a better one. Under Section 1256 of the Internal Revenue Code, gains and losses on regulated futures contracts are split 60/40: 60% taxed at the long-term capital gains rate and 40% at the short-term rate, regardless of how long you held the position.12Office of the Law Revision Counsel. 26 USC 1256 – Section 1256 Contracts Marked to Market Even a five-minute scalp gets the blended rate.
The trade-off is mark-to-market accounting. Any open futures position is treated as if sold at fair market value on December 31, and unrealized gains or losses on that date are taxed in the current year. You can’t defer gains by carrying a position into January. Section 1256 gains and losses are reported on IRS Form 6781.13Internal Revenue Service. About Form 6781, Gains and Losses From Section 1256 Contracts and Straddles One upside of the mark-to-market rules: Section 1256 losses can be carried back up to three years against prior Section 1256 gains, which is more generous than the loss carryback for ordinary securities.
A Note on Circuit Breakers and Stop Orders
CME Group applies dynamic, volatility-based circuit breakers to crude oil futures rather than fixed daily price limits. If the price moves beyond a threshold calculated from the prior settlement, trading pauses briefly.14CME Group. Price Limits – Ags, Energy, Metals, Equity Index These pauses can trigger repeatedly in extreme sessions, as they did when WTI collapsed into negative prices in April 2020. The practical consequence for you: a stop-loss order may not fill at your intended price if the market gaps through it during a halt. Plan for slippage.