What is gasoil?
Gasoil is one of the many products obtained from crude oil. This is the fuel used for heating and machinery in the construction and agriculture industry and is considered to be a cheaper substitute for road diesel. A barrel of crude oil may contain around 25 per cent gasoil, which makes this product the second most prevalent product in the barrel after gasoline (petroleum). Gasoil is sometimes referred to as red diesel because it is coloured intentionally to distinguish it from regular diesel.
Gasoil can be traded through a variety of derivative instruments linking to this product as their underlying commodity. It is traded with gasoil futures, options and other forms of derivative contracts. The futures contract related to gasoil is traded on the Intercontinental Exchange (ICE) and New York Mercantile Exchange (NYMEX). The contracts sizes traded on ICE are expressed in metric tons of gasoil with specified characteristics (sulphur level and density), where settlement is executed with physical delivery. Gasoil prices are stated per metric ton.
Performance of the gasoil price in the past
In the past 10 years, gasoil achieved its highest spot price at the beginning of January 2011, when it was traded at a value of $1,033 (£774). Since then, the price of this commodity has moved downward, with the lowest value experienced in January 2020, which directly coincided with the outbreak of the Covid-19 pandemic.
The price chart shows that the gasoil price may move in a variety of ways, which makes this commodity and related instruments appealing for trading. Although there is a high to low price discrepancy of hundreds of per cent, the gasoil price may also fluctuate more than 30 per cent over a couple of months and go through significant price retracements. Traders may expect to see retracements in the gasoil price of around 10 per cent.
Gasoil prices may move in short-lasting trends, as well as move in a defined range interrupted by multiple price swings. The manner in which the value of this commodity fluctuates means that it can be attractive to traders with a different trading strategy.
How to invest in gasoil?
There are many ways to invest in gasoil. They differ in terms of the size of required capital, the need for physical delivery, defined maturity date, speed of execution of trades, levels of liquidity, etc. Traders can invest in gasoil through direct purchase, by trading classic derivative instruments or by buying units from managed funds such as ETFs. Instruments created by the Currency.com leveraged trading platform using blockchain technology is yet another way to invest in gasoil.
The fundamental way for traders to benefit from fluctuations in the gasoil value is to purchase and store a certain quantity of this fuel from a supplier and wait for the price to increase. This means that you can trade only in anticipation of a price increase. It would be rather difficult to hold a short position on the expectation of a price drop unless you enter some form of complex contract with the supplier.
Trading derivative instruments such as futures may lack flexibility as they are contracts with predefined execution and delivery conditions. Closing or cancelling your positions with a futures contract may be complex, time-consuming and costly. Traders have a limited ability to benefit from short-term value changes unless they have a large amount of capital for trading.
The trading system developed by the Currency.com platform eliminates the main drawbacks of the other instruments through the tokenisation of real assets. The value of the reference commodity is connected with the value of the tokenised instruments, and any fluctuations in the commodity price is instantly reflected in the tokenised asset.
Traders who own Bitcoin or Ether no longer need to exchange the cryptocurrencies prior to trading tokenised gasoil or any of the other tokenised assets: Currency.com enables these traders to open positions directly with crypto and avoid any time-consuming steps and expensive fees.
Currency.com gives traders the chance to trade tokenised gasoil with a margin of 2 per cent, while the leverage for other tokenised assets may be as high as 1:100. This means that traders can make significant profits with a smaller amount of money. For instance, $500 (£375) of trading capital and 2 per cent margin means that you can open a position worth $25,000 (£18,725). A 3 per cent change in the anticipated direction will bring you a profit of $750 (£532) instead of a profit of $15 (£11), which would be the amount earned on a $500 position if you traded without margin.
Tokenised gasoil trading guide
Gasoil trading using tokenised assets through the Currency.com leveraged trading platform is quite easy, with just a few simple steps required:
- 1. Open an account on Currency.com. Currency.com ensures a high level of security using two-factor authentication security (2FA).
- 2. Deposit Bitcoin or Ether or fund the account with fiat currency.
- 3. Calculate the value of your positions based on the available capital and the Currency.com margin. Don’t forget that it is only 2 per cent for this commodity.
- 4. Based on your analysis you can determine the position (buy or sell) you want to take with tokenised gasoil. The buy and sell orders are initially matched between the platform participants. Afterwards, Currency.com matches the free orders through Capital.com, LMAX Digital, or Binance, Bitstamp, Kraken, NASDAQ, NYSE and Gain Capital.
- 5. You can choose to close your positions in accordance with your trading strategy and enjoy the profits.
Why trade tokenised gasoil with Currency.com
Gasoil trading with Currency.com tokenised securities exchange has a number of advantages. Tokenised assets are underpinned by robust and immutable blockchain technology and opening a trade will give you a token that tracks and moves according to the underlying instrument’s price.
- One-stop crypto trading platform
Trade tokenised gasoil with Bitcoin or Ethereum. Benefit from the commodity’s price movements without turning your crypto assets into fiat.
Trade tokenised gasoil with a tight market spread, benefit from maker rebates and competitive taker fees.
Experienced traders can trade the world’s top commodities, like gasoil, with up to 1:100 leverage.
- Effective risk management
Manage your risks and secure your profits with stop-loss and take-profit orders. Save your assets with negative balance protection.
We have a scalable and low latency order management system, which can execute 50 million trades per second.
Currency.com operates under new Belarusian regulation with best-in-class AML and KYC laws. Regulatory details and fees are upfront.