Gasoline
Many traders are now considering gasoline trading following the recent surge in petrol prices in the UK and increases around the world. Gasoline prices hit an all-time high in the UK during 2021 and traders may be looking to claw back some of their increased fuel expenditure through purchasing gasoline futures or options. This 2023 article will cover gasoline trading economics, strategies, the range of instruments available and the pros and cons of the commodity. We have also compiled a list of the best brokers for gasoline trading below:
Top Gasoline Trading Brokers
These are the 10 best brokers for trading Gasoline:
#1 - AvaTrade
Leading forex and CFD broker since 2006, regulated in Ireland, Australia, Canada, Japan, Abu Dhabi, and South Africa. AvaTrade offers multiple trading platforms, including MT4, MT5, Web Trader, Mobile App, Vanilla Options and Social Trading. 1250+ financial instruments, educational content and multi-language customer support active 24/7. 20% welcome bonus available in allowed countries.
"AvaTrade is an excellent broker for traders of all experience levels. Beginners benefit from high-quality education, social trading and a low minimum deposit. 1000+ tradable instruments and powerful proprietary software also make AvaTrade suitable for seasoned traders."
- DayTrading Review Team
- Instruments: CFDs, Forex, Stocks, Indices, Commodities, ETFs, Bonds, Crypto, Spread Betting
- Regulator: ASIC, CBoI, FSA, FSCA, FSB
- Platforms: MT4, MT5, AlgoTrader, TradingCentral, DupliTrade
- Min. Deposit: $100
- Min. Trade: 0.01 Lots
- Leverage: 1:30 (Retail) 1:400 (Pro)
Commodities
AvaTrade offers trading of 18 commodities:
- Cannabis
- Cocoa
- Coffee
- Copper
- Corn
- Cotton
- Gasoline
- Gold
- Lithium
- Natural Gas
- Oil
- Palladium
- Platinum
- Precious Metals
- Silver
- Soybeans
- Sugar
- Wheat
CFD Trading
AvaTrade offers leveraged CFD trading on a range of asset classes spanning stocks, indices, commodities, bonds, crypto, and ETFs. Traders can speculate on rising and falling prices with low fees and stable platforms in a highly regulated trading environment.
Forex Trading
AvaTrade offers 50+ currency pairs and their spreads are some of the best among any broker. You can trade majors, minors and exotics around the clock with zero commissions.
Stocks Trading
AvaTrade is a top-rated broker with access to leading exchanges including NYSE & FTSE. Take positions on leading tech firms like Tesla, Apple and Microsoft with no restrictions and reliable support.
Crypto Trading
Regulated in five continents, AvaTrade offers a secure way to access crypto markets. They offer a great range of digital currencies, very tight spreads, and 1:2 leverage. [Not available in Canada]
Pros
- Low spreads and zero commissions
- AvaSocial app for copy trading
- Easy and fast to get started
Cons
- Some withdrawal methods are slow
- Inactivity fee after three months
#2 - Pepperstone
Pepperstone is a leading online broker with over 400,000 clients in more than 175 countries. The top-rated firm offers excellent market access, industry-leading platforms in MT4, MT5, TradingView and cTrader, plus low fees with no hidden charges. Pepperstone is also heavily regulated with a high trust score, holding licenses with reputable bodies, including the FCA, ASIC, DFSA, and CySEC.
"Pepperstone is a best-in-class broker. Experienced traders benefit from razor sharp spreads with sophisticated automation tools and over 1000 instruments. Newer traders get user-friendly platforms, rich education materials and 24/7 support."
- DayTrading Review Team
- Instruments: CFDs, Forex, Currency Indices, Stocks, Indices, Commodities, ETFs, Crypto, Spread Betting
- Regulator: FCA, ASIC, CySEC, DFSA, CMA, BaFin, SCB
- Platforms: MT4, MT5, cTrader, TradingView, AutoChartist, DupliTrade
- Min. Deposit: $0
- Min. Trade: 0.01 Lots
- Leverage: 1:30 (Retail), 1:500 (Pro)
Commodities
Pepperstone offers trading of 18 commodities:
- Cocoa
- Coffee
- Copper
- Corn
- Cotton
- Gasoline
- Gold
- Livestock
- Natural Gas
- Oil
- Orange Juice
- Palladium
- Platinum
- Precious Metals
- Silver
- Soybeans
- Sugar
- Wheat
CFD Trading
Pepperstone is a fast and reliable CFD broker with 1200+ assets covering forex, commodities, shares, indices, and ETFs. You can also trade currency indices, which aren't available at many alternatives. CFDs can be traded on four leading platforms with a choice of accounts and base currencies. Expert Advisors (EAs) are also supported for automated trading strategies.
Forex Trading
Pepperstone offers ultra-low spreads from 0.0 pips on the Razor account and has an excellent selection of 60+ pairs. The broker boasts an impressive 99.94% fill rate with no requotes or dealing desk intervention. Forex lots start at 0.01.
Stocks Trading
Pepperstone offers hundreds of shares covering US, UK, Australian and German stock markets. Traders can go long or short on big names like Tesla with deep liquidity and competitive commissions.
Crypto Trading
Take positions on cryptos like Bitcoin with up to 1:10 leverage. Pepperstone also offers popular altcoins, as well as crypto indices, which offer a holistic view on the digital currency market.
Pros
- Award-winning customer support via telephone, email or live chat
- Active Trader Program for high-volume traders with discounts on forex, indices and commodities (eligible jurisdictions only)
- World-renowned broker with licenses in 7 jurisdictions, including the UK (FCA) and Cyprus (CySEC)
Cons
- Traders from the US not accepted
- Limited payment methods for UK clients
- Cryptos only available for professional clients in some jurisdictions
#3 - eToro
eToro is a top-rated multi-asset platform which offers both investing in stocks and cryptoassets. Launched in 2007, the brand has millions of active traders globally and is authorized by tier one regulators, including the FCA and CySEC. Crypto Trading is offered via eToro USA LLC; Investments are subject to market risk, including the possible loss of principal. CFDs are not available in the US Cryptoasset investing is highly volatile and unregulated in the UK and some EU countries. No consumer protection. Tax on profits may apply. 74% of retail accounts lose money.
"eToro is a great pick for traders who want to trade CFDs with copy trading and other social investing features. The brand is hugely respected with a string of awards and strong regulatory oversight."
- DayTrading Review Team
- Instruments: Crypto
- Regulator: FCA, ASIC, CySEC, FSA
- Platforms: TradingCentral
- Min. Deposit: $10
- Min. Trade: $10
Commodities
eToro offers trading of 22 commodities:
- Aluminium
- Cannabis
- Cocoa
- Coffee
- Copper
- Corn
- Cotton
- Gasoline
- Gold
- Iron
- Lead
- Lithium
- Livestock
- Nickel
- Oil
- Palladium
- Platinum
- Precious Metals
- Silver
- Soybeans
- Sugar
- Wheat
CFD Trading
Trade CFDs on over 3,000 assets and enjoy rich market data through integrated TradingView charts. There is also comprehensive free learning tools via the eToro Academy, ideal for beginners. Fees are low and leverage is in line with regulatory requirements, helping to provide a secure trading environment.
Forex Trading
An impressive selection of 52 currencies are tradeable on eToro's proprietary platform and app. Traders can also continuously hone their forex strategies by switching between demo mode and their live account any time.
Stocks Trading
eToro offers access to thousands of stocks and shares from all over Europe, the US and beyond. Traders can invest alone or join millions of other traders in eToro's popular social trading community. Buy-and-hold investors can also use the broker's intuitive Smart Portfolios.
Crypto Trading
eToro leads the way in cryptocurrency trading. The lowest spreads (from 1% for BTC), their own wallet service and the largest number of cryptos to trade in the market. Cryptoasset investing is highly volatile and unregulated in the UK and some EU countries. No consumer protection. Tax on profits may apply.
Pros
- Islamic/Halal-friendly account
- Good user reviews and app rankings
- Commission-free stock trading
Cons
- Limited contact methods
- No guaranteed stop loss
- No MetaTrader 4 (MT4) or MetaTrader 5 (MT5) platforms
#4 - Skilling
Skilling is a multi-asset broker founded in 2016 and based in Cyprus. The brand offers hundreds of instruments with competitive spreads from 0.1 pips and beginner-friendly platforms. Skilling are also regulated in Europe and beyond with a transparent pricing structure. Sign up and start trading in three easy steps.
"Skilling is a top pick for beginners looking for user-friendly platforms, copy trading features and educational resources to learn as you invest."
- DayTrading Review Team
- Instruments: Offers CFD’s in Forex, CFD’s in Stocks, CFD’s in Indices, CFD’s in Commodities and CFD’s in Cryptocurrencies
- Regulator: CySEC, FSA
- Platforms: MT4, cTrader, TradingView, AutoChartist
- Min. Deposit: $100
- Min. Trade: 0.01 Lots
- Leverage: 1:30 (EU), 1:200 (Pro), 1:500 (Global)
Commodities
Skilling offers trading of 18 commodities:
- Aluminium
- Cocoa
- Coffee
- Copper
- Corn
- Cotton
- Gasoline
- Gold
- Natural Gas
- Nickel
- Oil
- Palladium
- Platinum
- Silver
- Soybeans
- Sugar
- Wheat
- Zinc
CFD Trading
Take positions on hundreds of CFDs covering stocks, indices, forex and commodities. Get competitive pricing and ultra-fast execution while leverage can boost your purchasing power and potential returns.
Forex Trading
Skilling offers Standard and Premium accounts with competitive leverage and spreads across a wide range of major, minor and exotic forex pairs. Over 70 currencies are available, providing more trading opportunities than most competitors.
Stocks Trading
Hundreds of stock CFDs are available including some of the most popular companies like Apple and Tesla. The slick proprietary platform also makes it easy for beginners to get started while the range of shares beats most rivals.
Crypto Trading
Trade 50+ crypto pairs via leveraged CFDs. The list of tokens is longer than many rivals and the broker offers a secure trading environment. Cryptocurrency trading is not available to traders in China.
Pros
- Demo account
- Trusted and licensed by the CySEC and FSA
- Highly rated broker
Cons
- Limited market research
- Fairly new brand
#5 - FxPro
FxPro is an award-winning forex, CFD and spread betting broker with over 2 million clients worldwide. The broker is regulated in 4 jurisdictions and offers 24/5 customer support, earning it a high trust and safety score. FxPro has also picked up more than 100 industry accolades for its competitive trading conditions, including fast execution and deep liquidity.
"FxPro is best for traders looking for wide market access with thousands of instruments and reliable trading platforms, including MT4, MT5 & cTrader."
- DayTrading Review Team
- Instruments: CFDs, Forex, Stocks, Indices, Commodities, Futures
- Regulator: FCA, CySEC, FSCA, SCB, FSC
- Platforms: MT4, MT5, cTrader, AutoChartist, TradingCentral, DupliTrade
- Min. Deposit: $100
- Min. Trade: 0.01 Lots
- Leverage: 1:30 (Retail), 1:500 (Pro), 1:1000 (Via Prime Ash Capital Limited)
Commodities
FxPro offers trading of 7 commodities:
- Gasoline
- Gold
- Oil
- Palladium
- Platinum
- Silver
- Soybeans
CFD Trading
FxPro offers thousands of CFDs on forex, commodities, indices, shares and futures with 24/5 multilingual support. Traders also benefit from low latency datacentre co-location.
Forex Trading
Trade 70+ currency pairs with ultra-fast execution speeds and tight spreads from 0.46 pips on EUR/USD. The range of forex assets outranks many rivals.
Stocks Trading
FxPro offer hundreds of assets in their shares portfolio. Stocks from major economies including the US, UK, France and Germany can all be traded on leading platforms with no hidden fees.
Crypto Trading
Non-UK FxPro traders can access CFDs on 28 popular cryptocurrencies, including Bitcoin and Ethereum as well as smaller tokens like Tron. Crypto assets are all traded in pairs with USD and, as derivative products, are not directly traded or owned.
Pros
- Thousands of CFDs across 6 asset classes with a particularly impressive range of indices and precious metals
- 4 superior trading platforms including MT4, MT5, cTrader and the broker's powerful proprietary solution
- Interactive learning center for beginners with tests, courses, video tutorials and webinars
Cons
- Relatively high fees on some assets
- Limited payment methods
- Inactivity fee applied to dormant accounts
#6 - XTB
XTB is one of the largest stock exchange-listed forex and CFD brokers in the world, offering access to over 5800 instruments on their xStation platform. They boast 700,000 active traders, 20 years experience and authorization from tier-one regulators, including the UK's FCA.
"XTB is a great option for beginners with a user-friendly platform, no minimum deposit and low trading fees. The free education center is also a bonus, as well as the straightforward account opening process."
- DayTrading Review Team
- Instruments: CFDs, Forex, Stocks, Indices, Commodities, Crypto
- Regulator: FCA, CySEC, IFSC, KNF, DFSA
- Platforms: Own
- Min. Deposit: $0
- Min. Trade: 0.01 Lots
- Leverage: 1:500
Commodities
XTB offers trading of 13 commodities:
- Cocoa
- Coffee
- Copper
- Cotton
- Gasoline
- Gold
- Natural Gas
- Nickel
- Oil
- Precious Metals
- Silver
- Soybeans
- Sugar
CFD Trading
Trade a large suite of 2100 CFDs with ultra-fast execution speeds and 24-hour trading. You can build a diverse portfolio with access to forex, indices, commodities, cryptos, stocks and ETFs. Retail traders also get negative balance protection and zero commissions.
Forex Trading
Trade 48 currency pairs with low spreads from 0.1 pips and leverage up to 1:30 (EU) and 1:500 (Global). Micro lot trading is also available and new currency traders can make near-instant deposits with no fees.
Stocks Trading
Trade hundreds of stock CFDs with tight spreads, no commissions and 1:10 leverage. Go long or short on leading firms like Amazon, Barclays and BMW. Commission-free share dealing is also available on 15 leading exchanges. In addition, 20 indices are available, including in the US, China and Germany.
Crypto Trading
XTB offers an excellent range of crypto markets, all with competitive spreads. They also offer intra-crypto pairs such as ETH/BTC and DSH/BTC. Cryptos can be traded 24/7 in a secure environment with transparent accounts.
Pros
- 1:500 leverage for global traders
- 5800+ instruments covering major markets
- 3000+ fractional shares
Cons
- Not available to US clients
- Instrument portfolio limited to mostly CFDs
- Single platform offering
#7 - Plus500
Plus500 is a leading global broker with millions of registered traders and multiple awards. The company specializes in CFDs on its intuitive, proprietary platform and app. The broker holds multiple licenses from reputable regulators, including in the UK, Europe and Australia.
"Plus500 is a great option for CFD traders seeking a trustworthy broker with extensive market access, low fees and a reliable trading platform."
- DayTrading Review Team
- Instruments: CFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options
- Regulator: FCA, ASIC, CySEC, DFSA, MAS, FSA, FSCA, FMA, EFSA
- Platforms: Own
- Min. Deposit: $100
- Min. Trade: Variable
- Leverage: 1:30
Commodities
Plus500 offers trading of 17 commodities:
- Aluminium
- Cannabis
- Cocoa
- Coffee
- Copper
- Corn
- Cotton
- Gasoline
- Gold
- Lithium
- Livestock
- Oil
- Platinum
- Silver
- Soybeans
- Steel
- Sugar
CFD Trading
Commission-free CFDs span an excellent range of markets. Traders can go long or short on popular assets with variable leverage and competitive spreads.
Forex Trading
Plus500 offers forex trading via CFDs with tight, variable spreads and an impressive range of over 70 currency pairs.
Stocks Trading
Plus500 provides hundreds of shares across UK, US and European markets (via Plus500Invest platform). We particularly rate the access to ESG opportunities and the emerging cannabis sector, which are not available at many alternatives.
Pros
- No commissions and tight spreads on over 2,800 instruments across forex, shares, indices, commodities, options and ETFs
- Premium service for professional traders with added benefits including external webinars, expert analysis and a dedicated client manager
- Excellent reputation with 24 million clients worldwide and licensed in multiple jurisdictions
Cons
- No MetaTrader 4 integration
- $10 monthly inactivity fee
- No copy trading
#8 - CMTrading
CMTrading is one of South Africa's leading online brokers, offering trades with leverage up to 1:1000 on the MetaTrader 4 and browser-based Sirix platforms as well as a bespoke copy trading service. The brokerage launched in 2012 and holds a license with South Africa’s Financial Sector Conduct Authority (FSCA).
"CMTrading is a great choice for traders based in South Africa who want to access highly leveraged forex and CFDs and copy trading tools."
- DayTrading Review Team
- Instruments: Forex, CFDs, indices, shares, energies, metals, cryptocurrencies
- Regulator: FSCA, FSA
- Platforms: MT4
- Min. Deposit: $100
- Min. Trade: 0.01 Lots
- Leverage: 1:200
Commodities
CMTrading offers trading of 9 commodities:
- Coffee
- Corn
- Cotton
- Gasoline
- Gold
- Oil
- Silver
- Sugar
- Wheat
CFD Trading
Trade CFDs on forex, shares, indices, energies, metals and cryptocurrencies with variable leverage up to 1:200 and floating spreads. Traders can use the popular MetaTrader 4 platform or try the user-friendly, web-based Sirix, which also delivers real-time trading tips and detailed market forecasts.
Forex Trading
Trade 50 forex pairs with floating spreads starting from 2+ pips on the regular account through to a minimum of 0.9 pips on premium ECN accounts. Traders benefit from in-depth forex education resources on CMTrader's academy and from daily signals.
Stocks Trading
Trade CFDs on 110 global stocks including Alibaba, Apple and Citigroup with 1:10 leverage and spreads from 0.1. Traders can also speculate on nearly 20 stock indices covering major exchanges in the UK, US, Hong Kong, Japan and Europe. This is a wider selection than most brokers.
Crypto Trading
Trade 23 of the most popular cryptocurrency assets, including BTC, ETH and SOL, in CFD pairs with USD and spreads from 0.02. Traders will not own the underlying tokens with these derivatives.
Pros
- Rich array of educational resources on the online academy
- Bespoke, easy-to-use copy trading platform
- Reliable broker regulated by South Africa's FSCA
Cons
- Withdrawal fees
- High deposit thresholds to access accounts with the best spreads
- Wide spreads on most account types
#9 - FBS
FBS is an award-winning forex and CFD broker based in Cyprus. The broker has a strong global reputation with authorization from the CySEC and ASIC, amongst others regulators. The brand has clients in over 190 countries, attracted by a diverse range of markets, the reputable MetaTrader platforms, plus trading promotions.
"FBS is a great choice for traders of all experience levels and budgets with a range of account types and access to both MetaTrader 4 and MetaTrader 5."
- DayTrading Review Team
- Instruments: CFDs, forex, indices, shares, commodities, cryptocurrencies
- Regulator: ASIC, CySEC, IFSC, FSCA
- Platforms: MT4, MT5
- Min. Deposit: $1
- Min. Trade: 0.01 Lots
- Leverage: 1:30 (EU & Restricted Countries), 1:3000 (Global)
Commodities
FBS offers trading of 5 commodities:
- Gasoline
- Gold
- Natural Gas
- Oil
- Silver
CFD Trading
Go long or short on an excellent suite of financial markets with leveraged CFDs. Users can choose between three reliable platforms with fast execution, floating spreads from 1 pip and around the clock customer support.
Forex Trading
Trade 40+ popular majors, minors and exotics with tight spreads. FBS also offers an excellent suite of forex market research and education, including news, courses, and daily analysis.
Stocks Trading
Trade on a range of UK, US and German shares with a competitive 0.7% commission on US stocks. The free economic calendar can also be used to track major events and inform strategies.
Crypto Trading
FBS offers trading on crypto/metal, crypto/crypto or crypto/fiat pairs. A strong selection of 60+ pairs are available, including BTC/USD and BTC/XAU. There is also a dedicated crypto account.
Pros
- Trusted broker with top-tier licenses, several notable awards and negative balance protection
- NDD technologies ensure fast order execution within 0.4 seconds and no requotes
- No commission on deposits or withdrawals and low minimum deposits, ideal for beginners
Cons
- Average spreads on some assets
- Fewer account types for UK and EU clients
- No copy trading
#10 - Axi
Axi is a global forex and CFD trading firm, trusted by investors around the world. Highly leveraged trading opportunities plus a $0 minimum deposit make it a popular broker with beginners and seasoned traders. Axi also stands out for its resources, including copy trading and Myfxbook.
"Axi will appeal to forex traders in particular with more than 70 currency pairs, ultra-fast execution speeds and no restrictions on trading strategies, including EAs."
- DayTrading Review Team
- Instruments: Forex, CFDs, indices, shares, commodities, cryptocurrencies
- Regulator: FCA, ASIC, DFSA, FMA
- Platforms: MT4, AutoChartist, DupliTrade
- Min. Deposit: $0
- Min. Trade: 0.01 Lots
- Leverage: 1:400
Commodities
Axi offers trading of 10 commodities:
- Cocoa
- Coffee
- Copper
- Gasoline
- Gold
- Natural Gas
- Oil
- Platinum
- Precious Metals
- Silver
CFD Trading
Trade CFDs with dynamic leverage on a multitude of markets, including forex, shares, indices and commodities. Raw spreads are available from 0 pips rivalling leading competitors.
Forex Trading
Axi offers a great selection of 70+ major, minor and exotic currency pairs. There are no restrictions on trading strategies and the broker boasts impressive spreads by connecting to 20 liquidity sources.
Stocks Trading
Trade over 100 US, UK and European stocks. There are zero commissions, long or short opportunities, and dividend paying equities available. Users can also turn to Autochartist to scan the stock market for signals.
Crypto Trading
Axi offers all the well-known cryptos paired with fiat currencies, other tokens and metals. High leverage up to 1:200 is available on digital currency trades and users can deploy various strategies, from scalping to position trading.
Pros
- MT4 NexGen software
- Stock CFDs in US, UK and European markets
- Highly regulated – traders can be assured the broker is not operating a scam
Cons
- Limited choice of trading platforms
- Demo account expires after 30 days
- Crypto CFDs are only available to professional clients
What Is Gasoline Trading?
Gasoline, not to be confused with natural gas or gasoline’s raw material form of crude oil, refers to the refined chemical product that functions as fuel for petrol vehicles. Often referred to as RBOB, which stands for ‘reformulated gasoline blendstock for oxygenate blending’, gasoline is produced to several octane standards that influence the price per gallon of the fuel.
Gasoline trading exposes investors to market determinants beyond those of unrefined crude. This creates additional opportunities for options and futures. Seasonal and regional issues that affect the refinement and transportation of gasoline can impact the value of gasoline, whilst leaving crude unimpacted.
The History Of Gasoline Trading
Gasoline trading prices have a fairly volatile history, with gasoline futures seeing a low of $0.44 per gallon at the height of the COVID-19 pandemic due to low demand.
Despite many of us seeing steady increases at the roadside pumps over the years, the sale price of consumer gasoline is not always correlated to the price that futures are trading at.
Historically, gasoline futures have been heavily impacted by economic health, with highs of over $3.50 per gallon in June 2008 and crashing down to just over $1.00 before the end of the year.
Gasoline Trading Economics
Various factors impact gasoline trading prices, with many price determinants rooted in its unrefined form of crude oil. The potential for demand-based price change was seen during the COVID-19 pandemic when gasoline trading prices plummeted due to the reduced use of vehicles during the global lockdowns.
Seasonal factors can also be a huge contributor, especially since a significant number of the refineries for gasoline are located on the Gulf Coast. Frequent adverse weather conditions in that region can subsequently impact the supply of crude oil to these refineries, as well as the delivery of gasoline from them.
Regional taxation can also impact gasoline separately from crude oil, with many jurisdictions applying a tax only when a substance is in refined fuel form. Conversely, some countries offer subsidies on fuel prices to encourage growth and these can also impact gasoline trading prices.
Despite a significant switch from diesel to petrol in Europe following the emissions scandal, long-term gasoline price considerations should also, in theory, take into account the emergence of the electric vehicle market.
However, electric vehicles are likely to have a slower uptake in emerging markets such as India and China, where the growth of the middle classes continues to grow demand for new cars. Advances in alternative and synthetic fuels could also have shorter-term impacts on gasoline trading prices.
The Gasoline Trading Price Today
How To Trade Gasoline
Here are the vehicles with which gasoline can be traded:
Gasoline Futures
Unlike many other commodities, there is no gasoline spot market available to everyday traders. However, traders can buy and sell gasoline futures contracts instead.
Trading gasoline futures involves committing to a contract to purchase the commodity at a set future time point. Futures contracts will often expire at a set time in the month with brokers and exchanges providing differing lengths of contracts to traders. The purchase price of a contract is agreed upon at the time of purchase and is based on the market prediction of the future trading price.
Futures can utilise leveraged trading to enhance profits from contracts but also come with the risk of increased losses. Traders can cash settle their contract ahead of expiry with another futures contract or sell their contract on to another buyer. It is important to settle a futures contract before its expiry to prevent you from needing to take delivery of thousands of gallons of gasoline.
Gasoline Trading Companies
An indirect method of investing in gasoline is through purchasing shares of companies that refine oil into gasoline. Examples of publically traded refinery companies include ExxonMobil, Shell, BP and Petrochina.
Often, these global gasoline trading companies are involved in more than just gasoline, producing other chemicals like diesel and natural gas. This means that the company’s share value will have far more determinants than merely the trading price of gasoline.
Gasoline ETFs
Exchange-traded funds, or ETFs, are day-tradable funds that act as trackers for specific markets, industry sectors or commodities. The main advantage of these over traditional funds is that ETFs can be bought and sold at any time throughout the trading day.
Commodities ETFs come in two main formats: funds that track the spot or futures price of an asset and ETFs that bundle together companies involved in the production of the commodity.
For gasoline, there is only one ETF that functions as a tracker: the United States Gasoline fund. Energy company ETFs, on the other hand, are numerous and traders can choose between trading the larger energy market or gasoline and fuel specialists.
Gasoline Options Trading
Options trading is perhaps the most well-known trading derivative and can be used for leveraged speculation on future gasoline trading prices. Options contracts differ based on where they are created, so make sure you are familiar with the specific options contracts in your region.
American-style options contracts provide traders with an option, though not the obligation, to buy an asset on a specified expiry date. They differ from futures in that options contracts allow traders to purchase contracts with set strike prices and expiry dates and they do not need to action the purchase if they would lose out.
Gasoline Spread Betting
Spread betting is another approach that can be used to speculate on gasoline trading prices through brokers. Spread betting can appeal to traders as it is a purely cash-based bet, with no physical gasoline involved.
Spread betting brokers will take the price that gasoline is trading at and offer a minimum increase and decrease value. If traders believe that the gasoline price will go past either of these values, they can bet on it, receiving cash for each ‘point’ the value of gasoline exceeds their bet.
Gasoline CFDs
CFDs operate on a similar premise to spread betting, where traders can speculate on price increases or decreases. As a result, they can potentially earn the difference between their predicted trading value and the gasoline trading price. CFDs often utilise leverage to increase gains but this also magnifies losses.
A CFD is an over-the-counter contract, meaning that they are offered by specific brokers rather than traded on an exchange. CFDs have no set expiry time but are subject to daily financing costs as well as additional overnight charges. Due to this, CFDs are primarily used as intra-day trading instruments.
Pros Of Gasoline Trading
Some of the benefits of trading gasoline include:
- Range Of Available Trading Instruments – An area where commodities excel is the range of instruments to choose from. Gasoline trading is available with CFDs, ETFs, spread betting, options contracts and futures.
- High Demand – The strong global demand for gasoline means that the market is likely to remain active and trade in large volumes. This enhances opportunities for successful derivatives trading and often leads to lower spreads.
- Both Long & Short Term Trading Opportunities – The price of gasoline has both long and short term determinants. The future global move to electric vehicles may eventually lead to reduced demand for gasoline. In the short term, factors such as crude oil supply and global transportation difficulties provide opportunities for market volatility.
Cons Of Gasoline Trading
It is also worth noting the following drawbacks when trading gasoline:
- Not As Volatile As Crude Oil – When using derivatives, volatile markets can potentially lead to greater profits. Of the two assets, crude oil is far more volatile, with one London-based trading house notoriously profiting over $500m when the oil futures value dipped below zero.
- No Spot Trading – Many of those that invest in commodities may wish to trade at current market prices or even receive physical delivery of their asset. Unfortunately, there are no trading spot markets and, while traders could receive delivery of their gasoline, it is far more difficult to store than, for example, precious metal bullion.
- Limited Share And ETF Options – Another area in which gasoline is lacking is the range of share and ETF options. With only one tracking ETF and no major companies dealing exclusively with gasoline, traders that wish to invest through stocks and shares may be out of luck.
Gasoline Trading Strategies
Here are a few ways in which traders can predict and speculate on the future trading price of gasoline:
Technical Analysis
A tried and tested method of price prediction for all trading markets is technical analysis. This involves using charting tools and overlays to identify both short and long-term trends in the value of an asset like gasoline. Through identifying levels of support and resistance, as well as established patterns in the market, traders aim to predict the next move.
Gasoline’s reduced volatility compared to crude oil may make long term price trends easier to identify, although, historically, external factors of supply and demand have proven to have a significant influence on gasoline trading economics.
Gasoline Trading News
This method of price prediction is less scientific than technical analysis but, for a supply-and-demand-sensitive commodity such as gasoline, it can often more accurately predict price movements.
By keeping up with gasoline trading news, whether this is upcoming taxation changes in a major region or the discovery of a new oil field for supplying crude oil, monitoring the price determinants of gasoline is crucial to creating an accurate gasoline price forecast. Changes in associated commerce areas such as the automotive industry will also have a significant impact on gasoline trading prices.
Hedging Strategies
Whether their predictions are long or short, there are hedging strategies that options traders can draw upon to cover themselves. Examples of these are the covered call and married put. These strategies involve opening opposing contracts to your prediction to protect against significant losses. However, these strategies are designed for a short term period of relative price neutrality. If a trader has strong bullish or bearish sentiments, a more advanced form of hedging may better suit their purposes.
How To Start Trading Gasoline
Select Your Preferred Instrument
Depending on factors like price predictions, timeframe and desired leverage, different instruments will suit different traders. While trading gasoline futures and options are both viable, vehicles for long-term investments are unfortunately limited compared to other assets.
Finalise Your Gasoline Trading Strategies
In addition to deciding which method of price prediction you are going to employ, a solid and repeatable strategy must be decided upon to facilitate continued successful trading. The best traders take both of these elements into account to construct a complete picture of a market.
If you are going to engage in gasoline options trading, it is worth considering hedging strategies to give yourself the best chance at successful trading. With different gasoline options trading strategies available for every type of market environment and price prediction, it is worth investing some time researching tried and tested strategies.
Find Gasoline Trading Brokers
When looking for gasoline trading brokers, it is important to first ensure they support the instrument that you wish to trade with. The next step is to check that they are a legitimate trading provider and, ideally, are monitored by a trustworthy regulator. Positive customer reviews and recommendations from trusted websites are also green flags when checking out gasoline trading companies.
As competitive spreads and fees are never far from a trader’s mind, it is worth delving into pricing structures and comparing gasoline trading brokers to their competition. Other aspects worth considering are margin and leverage capability, available trading platforms and deposit and withdrawal methods.
Open An Account
After completing your due diligence and deciding on a brokerage or exchange, the next step is to open a trading account.
Before depositing funds, some brokers may be required by their regulators to complete a know-your-customer (KYC) check to verify your identity and financial status. Verification can sometimes require personal documents and financial statements, so it is imperative to make sure you only register with legitimate gasoline trading brokers.
Once your account is fully set up and verified, it is time to deposit funds. This is normally a straightforward process as most gasoline trading brokers and companies support a wide range of methods for fast and secure deposits and withdrawals.
Place Your Trade
Now all of the legwork is complete, you can finally get started. It is important to stay on top of your trading strategy to both maximise profit and ensure that you do not end up needing to take delivery of thousands of gallons of gasoline. Use all the information above to inform entry and exit points.
Gasoline Trading Tips
If you are just about ready to start trading gasoline, here are a few final tips to help you trade:
Gasoline Trading Hours
When trading futures, the CME Globex operates local time trading hours of Sunday to Friday from 18:00 to 17:00 CST the next day. Trading stocks and ETFs will be subject to local market trading hours, while derivatives brokers will set individual opening hours.
Practice Trading
Paper trading is an excellent method of testing new strategies, where you can get a feel for unfamiliar markets and explore new instruments. Many gasoline trading brokers provide a demo account facility so that you can practise before risking real funds.
Final Word On Gasoline Trading
Gasoline may be a less popular trading asset than its raw state, crude oil, though global gasoline trading can still be a potentially viable source of profit. Whilst the trading price of gasoline largely reflects that of crude oil, it is also subject to separate factors such as regional taxation, changes in refinement costs and transportation.
A thorough understanding of gasoline trading economics can lead to successful speculation with gasoline futures and other derivatives such as options. Long-term gasoline investment can be tricky due to the lack of tracking ETFs but futures contracts can be leveraged to take advantage of long-term opportunities and trends.
FAQs
What Should I Look For In Gasoline Trading Brokers?
The ideal gasoline trading broker will vary depending on your specific trading needs, with many brokers and exchanges specialising in different trading instruments. However, universal positives to look out for in gasoline trading brokers include solid regulation, low fees, competitive spreads and a reliable trading platform.
Can I Use Gasoline For Options Trading?
Gasoline options contracts provide a great way to speculate on the price movements of the commodity and will be available through many gasoline trading brokers.
Which Factors Influence The Gasoline Trading Price?
The value of crude oil is a significant price determinant for gasoline but other factors include regional taxation, geographical supply issues of refined gasoline caused by environmental changes and refining costs and profits.
What Are Some Examples Of Gasoline Trading Companies?
Some examples of gasoline trading companies include ExxonMobil, Shell, BP and Petrochina. Many of these companies also produce other forms of energy, so share prices may not directly follow gasoline trading prices.
What Is The Difference Between Gasoline Trading & Crude Oil?
Gasoline is the refined product of crude oil that is used to power petrol vehicles. In terms of trading, crude oil is more volatile and a market with higher trading volume than gasoline.