Understanding Past Crude Oil Contract Data

S

slarabee

Okay another newbie question. I am slowly getting my head around commodities but I am not quite there yet. Any help is most appreciated.

In order for me to understand the contracts and profits/losses I have been looking a past contract price data and trying to understand how the process would have played out.

So picking a year out of a hat I looked at the data for the DEC 1990 WTI Contract found here:

http://www.quandl.com/OFDP-Open-Fin...Crude-Oil-Futures-December-1990-CLZ1990-NYMEX

So am I understanding it correctly that if I had a crystal ball back then I could have bought the CLZ1990 contract(s) at a low of $18.38 per barrel on July 6 and then sold it on Sept 28th at $38.31 before delivery and made a profit of approximately $19 per barrel on that contract?

I think where things are a little hazy for me still are understanding the contract lengths and specifications.

The language of the specifications listed on CME are little bit vague for a person who has never traded in commodities.

TIA

Sean
 
Quote from slarabee:
----bought the CLZ1990 contract(s) at a low of $18.38 per barrel on July 6....
----sold it on Sept 28th at $38.31....
----profit of ~$19 per barrel on that contract?
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1) Hypothetically, you could have made the $19/barrel per contract. In reality, it would be highly unlikely. :)
2) A line chart doesn't show price extremes that could have stopped or spooked you out of a position beforehand. :(
3) The time period you're referring to was right after Iraq invaded Kuwait. Crude oil became very trendy AND volatile afterwards. :eek:
4) To trade the December-1990 contract, in July-1990, would have been "tricky". Deferred futures contracts for crude oil were less liquid back then than they are today. You could expect "large" slippage on entries AND exits back then. :mad:
5) The contract you're referring to had large retracements that you cannot dismissively ignore. If you had been stopped out "early", would you realistically be able to get "long" again? :confused:
 
Thank you for the replies.

I will have to do a little more reading and learning I guess as "slippage" and "retracements" are terms I need to understand and do not... yet.

Thank you for the concepts to explore.

Sean
 
Ahh lol man I am a newbie.

Looked up retracement and slippage and I see what you mean.

As I said in my example "If I had a crystal ball" the point of the thought process was so that I could understand the transaction process.

For the most part it sounds like I understand the process outside of liquidity issues back.

Your point is well taken the retracement on that contract in September was a $5 drop which would I am sure make most people (myself included) seriously consider selling during that perceived reversal.

Thanks again for your helpful reply.
 
Quote from tallent_e:

Do you make big money?
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Is 20 dollars alot on 100? no.. My size is small so "big" is relative.. That will come in time as many of us with a small account work towards..

Whats the difference to you? Is my statement less legit if i'm not swinging 7 figures?
 
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