Your math doesn't quite make sense.
You bought a contract for 1000 barrels of oil for $55,000. You paid $1000 for the contract.
The max out of pocket to you is $56,000 if the price of oil falls to $0 a barrel, not 85k or 110k.
I think you were subtracting out a profit as a loss. ie, you bought 1000 at 55, the price drops to 30, you sell the 1000 at 30, thus your loss is 56,000 - 30000 = 21,000.
Still a hefty loss, but not really any more of a loss than the S&P500 had in the same time period. Now if you are talking about doing things on margin, then I can understand how losses could get enormous.
I don't think I would actually do a futures investment, at least not in the sense of buying a oil contract. Possibly I might invest in a company that knows how to invest in futures...if I wanted that level of risk/return.
You bought a contract for 1000 barrels of oil for $55,000. You paid $1000 for the contract.
The max out of pocket to you is $56,000 if the price of oil falls to $0 a barrel, not 85k or 110k.
I think you were subtracting out a profit as a loss. ie, you bought 1000 at 55, the price drops to 30, you sell the 1000 at 30, thus your loss is 56,000 - 30000 = 21,000.
Still a hefty loss, but not really any more of a loss than the S&P500 had in the same time period. Now if you are talking about doing things on margin, then I can understand how losses could get enormous.
I don't think I would actually do a futures investment, at least not in the sense of buying a oil contract. Possibly I might invest in a company that knows how to invest in futures...if I wanted that level of risk/return.
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