Crude Oil is traded all over the world and inventories are probably one of the main events that happen in crude. Millions of traders all over the world are glued to their computer screens when crude oil inventories arrive. I myself refrain from trading during crude inventories because as soon as the inventory arrives, the market over reacts and jumps an obscene number of points in either direction.
Doesn’t matter what the inventory denotes, the market takes a plunge somewhere and then settles down after a while. I sold crude at 4094 and closed it at 4084 booking a sweet 80 rupees profit excluding taxes. However, post inventory, it broke 4000 and went down right to 3960! If I had kept my position and closed it at 3964 I could have a made a whopping 1200 rupees profit excluding tax! Such drastic amounts of P&L is possible because crude is highly leveraged.
As I write this post (11:00 PM), I am sitting on an unrealized loss of 100 rupees. It is still oversold on the RSI and I am hoping it would that it would jump to 4k levels so that I can book a decent profit, or at least break even. However, now that I only have half an hour to close my position, this seems highly unlikely. I might have to book a loss.
Lets see how that goes.
Update – 11:20 PM – I booked a loss of 200 rupees.
Trading is a serious business.