Menu: Archives:	Example For Lesson 3 Go Short Crude Oil - 2010 In this hypothetical example with hypothetical prices for the year 2010, you have sold a futures contract for crude oil for $25 a barrel and you have instructed your broker to buy a new futures contract for you if prices rise to $30 for a loss or if prices decline to $20 for a profit, whichever happens first. If the market declines to $20 before it rises to $30, you will make a profit of $5 a barrel. Your purchase price will be $20 and your selling price would have been $25 for a profit of $5 per barrel. How much money you will make in total will depend upon the size of the contract you are trading. If the contract size is 1000 barrels, you will make $5,000. If the contract size is 100 barrels, you will make $500. This does not take into consideration any commission you will have to pay for the transaction. In the futures markets, contract sizes for wheat, corn, gold, cattle, stock indices, currencies, and all other futures contracts are set and established by the exchanges where they are traded and any futures broker will be able to give you the current contract sizes for any futures or options contract you might be interested in.
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