What are heating oil futures?

NY Harbor heating oil futures (HO) are traded at the New York Mercantile Exchange (NYMEX) in units of 42,000 gallons (1,000 barrels), and are based on delivery in New York harbor, the principal cash market trading center. Heating oil, also known as No. 2 fuel oil, accounts for about 25% of the yield of a barrel of crude, the second largest "cut" after gasoline, and can be traded nearly 24 hours per day, 6 days per week.

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How to trade heating oil futures

Heating oil futures contracts are offered through NYMEX on the Globex® trading platform and are available to trade electronically through Schwab nearly 24 hours per day, 6 days per week. In addition to heating oil futures, NYMEX-listed crude oil (CL), natural gas (NG), and unleaded gasoline (RB) futures contracts are available to trade at Schwab. An account approved to trade futures is required in order to trade heating oil futures.

Heating oil futures contract specifications

Considering trading heating oil futures? Here are the heating oil futures contract specifications.

Exchange, Product Name, Product Code New York Mercantile Exchange (NYMEX), NY Harbor ULSD Heating Oil, HO
Contract Size 42,000 U.S. Gallons
Minimum Tick Size and Value 0.0001 cent per gallon, worth $4.20 per contract.
Trading Times Heating oil futures trade electronically on the Globex® platform from 6:00 p.m. U.S. ET until 5:00 p.m. U.S. ET, Sunday through Friday.
Principal Trading Months Primary heating oil futures contracts trade every calendar month, from January through December.

At Schwab, you also get access to advanced trading platforms and education, where you can take advantage of market research, real-time heating oil futures quotes, and other specialized tools.

Why trade heating oil futures?

Heating oil heats the homes of areas of the northeastern part of the U.S. where access to natural gas is minimal. Seasonal factors impacting heating oil use, along with the capabilities of oil refineries where heating oil must compete for refining capacity against gasoline can make the NY Harbor heating oil futures (HO) marketplace a dynamic place for hedgers and speculators to seize profit opportunities and hedge against the risks in the heating oil market.

As heating oil futures are heavily influenced by supply and demand, it's important to understand the factors which can impact the heating oil futures market. Most notably cold weather in the northeast and New England states heavily influences demand on this energy resource to heat homes and businesses, making it one of the most seasonally impacted energy contracts traded on the futures markets.

It is important to understand the benefits and risks involved with heating oil futures before placing a futures trade. Compared to traditional investments, with heating oil futures you can trade outside of the traditional market hours associated with equities and take advantage of trading opportunities regardless of market direction. Heating oil futures also provide the ability to trade with greater leverage and allow a more efficient use of trading capital. However, trading leveraged products like heating oil futures also involves the risk that losses can exceed the amount originally invested and may not be suitable for all investors.

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