Press "Enter" to skip to content

Small US Crude Oil Futures Introduced by The Small Exchange

Small US Crude Oil Futures (SMO) is a trading commodity delivering a small, efficient line to one of the world’s most consumed energy sources. It has been introduced by The Small Exchange, a futures exchange selling lower, more specific items targeted at retail customers. SMO provides smaller investors and traders with the same institutional-quality instruments as larger traders in the US Crude Oil industry.

Although offering pure exposure to one of the world’s most actively traded commodities, SMO contracts are less costly than most current and more capital effective than equivalent exchange-traded oil funds. Don Roberts, the Small Exchange President and CEO, said, “Small investors and traders now have a crude oil product that meets their risk tolerance, allows for easier access with lower margin requirements, and encourages portfolio diversification. We strive to create products that will give the smaller investor equal footing with larger institutions.”

The contract of the Small US Crude Oil Futures is a cash-settled futures contract whose underlying is a US-referenced blend of domestic light sweet crude oils with API gravity between 38° and 43° sulfur content of less than 0.42 percent. It will be available to trade through various brokerage firms, including Edge Clear, Interactive Brokers, and Tastyworks.

Morad Askar, Founder of Edge Clear LLC, said, “At Edge Clear, we have been pushing for a small-sized crude oil product for a long time. With the existing contracts, the independent online trader has to use much leverage, and the risk of physical delivery is too high.” The Small Exchange began trading in May 2020 and currently has 21 partners, including some of the world’s largest trading companies and stock exchanges. It has introduced eight goods ranging from stocks and bonds to commodities and currencies, with a total notional value of $2.4 billion.

Be First to Comment

Leave a Reply

Your email address will not be published. Required fields are marked *