Our Cash Oil CFD pricing methodology was specifically engineered to protect our clients against the short-term risks presented by a product that has an underlying deliverable market.
Deriving pricing from and hedging into deliverable futures contracts presents well-known market risks, that can be easily mitigated by rolling to a back-month contract at an appropriate time.
Invast Global actively monitors the liquidity and open interest in each of the future contract months to ensure that we do not expose our clients to short-term structural risks such as the market dislocation and illiquidity recently experienced in near-month contracts in the US Oil market.
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Our pricing methodology provides us with the flexibility to roll whenever is most appropriate given the spread of liquidity and open interest across all futures contracts.
Furthermore, this ensures that our pricing accurately reflects the spot price of Oil, being derived from futures pricing that is driven by true market-forces and is unaffected by the volatility that is attributed to structural market issues and illiquidity. An advantage of this approach is that our Cash Oil spreads remain as tight as possible at all times.