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How to Trade Gasoline Futures

You can buy or sell gasoline futures by opening a trading account with a trusted commodity broker who handles futures trading. Futures brokers must be registered with the Commodity Futures Trading Commission and the National Futures Association

CME Globex, CME Clear Port, AmeriTrade, OptionsXpress (owned by Charles Schwabb) are all well known online platforms for trading futures.

Most brokerages will charge the National Futures Association fees, which is roughly around $0.02 per side, along with a commission (which can range from $0.025 to $3 and more, per contract per side). You will also have to pay an exchange fee, which will vary depending on the exchange and on the specific contract being traded. Brokers will also require a margin deposit for each contract traded. Be sure to look at the fine print and add up all the fees into your cost.

Gasoline futures can be affected by various risks that accompany the underlying commodity.

Gasoline futures tend to dip seasonally, usually in the winter months of November and December, while peaking during April and May—all due to changing consumer needs. The U.S. dollar too generally impacts commodities and any sudden rise or fall in the dollar may cause huge spikes in price of gasoline as well.

The gasoline market is also heavily dominated by U.S. demand. If the U.S. demand for gasoline changes—due to new environmental regulations, developments in alternative energy or growth of better public transport— there could be severe price swings in the gasoline market.

Furthermore, given that gasoline is directly derived from crude oil, any kind of tensions in foreign markets or geopolitical scuffles that affect crude oil prices will cause huge spikes or dips in the price of gasoline as well.

Despite these price risks, gasoline remains a popular commodity—both in the physical market and in the financial market. Gasoline futures continue to be highly in demand and give market participants a convenient way to minimize risks, while allowing traders a chance to make substantial profits.

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