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How to Buy Oil ETFs
The investment in commodities like oil is a way to diversity to add your investment portfolio. Direct buy oil contracts, however, is tricky business. Instead, many investors traded funds or ETFs that invest directly or indirectly in oil contact exchange. The ETF pools together investment dollars and accepts the individual trades, while the investor to participate in the profit or loss associated with rising and falling oil prices. As with all ETFs are traded on the open markets such as equities Oil ETFs and they can be bought, sold or shorted.
1 Make Determine which category of oil ETF that interest you. ETFs can invest in oil in different ways. One category of ETFs invests directly in oil on futures contracts, the other category of ETFs investing in stocks of companies involved in the oil industry.
2 Research Oil ETFs in the category you are interested in. Many brokerage firms and financial companies offer screening tools that allow you to find an input parameter which investments match your criteria. Look for ETF volatility, fit into your investment strategy and their low expense ratio to its peer group. Depending on the screening tool, can oil ETFs with raw materials, energy and natural resources in the event that no specific category of "oil" where to be found.
3 Enter the sales order. ETFs are traded on stock exchanges and not by the companies they run. To oil purchase ETF shares in your trading account you enter a purchase order. In order to buy oil ETF, enter an order with the ETF symbol and the number of shares you buy. You will receive a confirmation of your broker through the mail or on the computer screen to obtain.
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