I’m sure they vary in length, but what’s the average? It would please me greatly to think that some large number of speculators are going tits-up due to the dive in oil prices, because they speculated last year and helped drive the prices up.
Crude oil futures are listed nine years forward using the following listing schedule: consecutive months are listed for the current year and the next five years; in addition, the June and December contract months are listed beyond the sixth year. Additional months will be added on an annual basis after the December contract expires, so that an additional June and December contract would be added nine years forward, and the consecutive months in the sixth calendar year will be filled in.
All I’m seeing from that is that trades are listed up to 9 years in advance. Trading months indicates that “months” are the basic unit of time, but how many months?
When you buy the futures contract, you are agreeing to buy X amount of Y, delivered at ABC on Mo/Yr. You can pick it up, or sell it to someone else to pick up. Crude Oil is discussedhere.
(From that site:
All deliveries are rateable over the course of the month and must be initiated on or after the first calendar day and completed by the last calendar day of the delivery month. )
So, if you want, you can buy a futures contract for 1000 barrels (that’s the single lot of a future contract), for delivery during the course of any month up to 9 years out. They only list individual months out 6 years, but you could buy a month at 7 yrs 2 month if you wanted to, but it wouldn’t be listed on the main schedule.
There are a lot more details that I don’t understand, but I hope that answers your question.
I’ve got all that. What I was hoping for was someone in the business stating “most contracts are for 1 year,” or something like that. I’m hoping that some people are taking a bath on their oil futures because they got greedy.
I think what you’re looking for is Open Interest. The actual number of contracts which are outstanding for any particular month out in the future.
Here is a table for today’s trading.
One thing to keep in mind is that if you are holding a contract for above the “Spot market” price, you have to sell your product off at a loss, if you don’t have, in turn, customers locked in to deliver the product to.
I once worked for a reseller of natural gas in the MA/NY area, and this was one of the biggest concerns about the business. If the weather got warm, and gas usage was down, the company was often holding on to surplus stock (gas in the pipelines) that they needed to sell off on the spot market. If the price was above their contract price, they made money (usually happened only during extra-high demand periods), if it was below, they lost money (usually during low demand periods.)
So, if the spot market is down, during the month of the contract (or date of delivery to the pipeline/truck/holding facility), they could easily lose a lot of money.