CME WTI crude oil futures are some of the most popular derivatives contracts in the world, featuring consistently robust traded volumes and order flow. Tens of thousands of participants target this exciting market on a daily basis.
Despite the popularity of WTI futures, many retail traders have been faced with a formidable problem: size. Now, CME Group’s new Micro WTI crude oil contract provides traders a more affordable way of engaging the world’s premier energy product.
Introduction to CME Micro WTI Crude Oil Futures
Perhaps the single largest advantage of trading CME futures is diversity. The CME offers an array of standardized products, including equities indices, metals, and energies. Also, with E-mini, Micro, and Micro E-mini contracts, retail players are able to fully customize their risk exposure.
Micro WTI crude oil futures combine the potential of West Texas Intermediate crude oil (WTI) with a more manageable risk profile. At 10 percent the size of standard WTI futures, Micro WTI is a vastly smaller contract. This offers traders a variety of benefits, specifically reduced margin requirements and minimal per tick values.
Here are the contract specs for CME Micro WTI crude oil:
| Exchange | NYMEX |
|---|---|
| CME Globex Symbol | MCL |
| Size | 100 barrels, 1/10th standard WTI |
| Minimum Tick | $0.01 per barrel |
| Tick Value | $1.00 per tick |
| Expiration | Monthly, one day before standard WTI |
| Settlement | Financial |
In total, the CME lists three WTI contracts for public trade: standard WTI, E-mini WTI, and Micro WTI. At only 100 barrels per contract, Micro WTI crude oil futures are much smaller than standard WTI (1,000 barrels) and E-mini WTI (500 barrels) futures. The result is vastly reduced leverage, which is reflected in the $1.00 per contract tick value. The Micro WTI $1.00 tick pales in comparison to both standard WTI ($10.00 per tick) and the E-mini WTI ($12.50).
Benefits of Trading Micro WTI Futures
For active retail energy traders, CME Micro WTI futures provide many unique benefits. Here are three of the most significant:
- Reduced margins: The Micro WTI contract is offered with a maintenance margin of $583 and an intraday margin of $291.50. These amounts are only a fraction of the $5,830 and $2,915 of standard WTI. (Note that margins are subject to change per market conditions and exchange guidelines.)
- Granularity: Micro WTI’s reduced contract size and applied leverage give participants the ability to fully customize any position’s assumed risk. By adding or subtracting MCL contracts from a position’s size on a one-by-one basis, traders can dial in market exposure with precision.
- Strategic alternatives: Both the reduced margin requirements and tick value of the MCL contract open the door to a wide range of strategic opportunities. Swing trading, multi-contract positioning, and long-term investment are a few of the most popular. Essentially, MCL enables retail traders to keep positions through market closures, avoid premature exits, and become active when faced with volatility.
Micro WTI crude oil futures give average retail energy traders the ability to hold positions overnight, tailor their risk exposure, and implement previously off-the-table strategies. Similar to Micro E-mini equity index futures, Micro WTI affords participants maximum strategic freedom. Like CME Group’s slogan says, “micro-sized crude oil, major possibilities.”
Boost Your Energy Market IQ with Introduction to Crude Oil Futures
Since the product launch in July 2021, the popularity of CME Micro WTI crude oil futures has grown quickly. Average daily traded volumes regularly eclipse 50,000, a solid metric for a fledgling listing. And as public interest grows, so will opportunity.
