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Can any individual like me take short position?

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Sure, if you can find a broker that will trade futures, you can take either a short or long position. You will most likely have to use a margin account and mark-to-market (adding funds if you're losing money) whether you go short or long.

Note that "shorting" futures is actually simpler than shorting, say, stocks or bonds, since you don't have to "borrow and sell" the underlying asset to go short. You just take the short side of a futures contract with another party.

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  • Since the settlement is physical type ,then what happens if I lose the betting due to increase in price.Do I have to deliver if I don't square off my position?How does it work – ROHAN PAUL Jun 29 '20 at 5:16
  • Yes if you don't close your position you'll have to deliver oil, which is why many retail brokers "auto-close" futures positions close to settlement. – D Stanley Jun 29 '20 at 12:03
  • But I don't own crude oil .So how do I deliver? – ROHAN PAUL Jun 29 '20 at 14:32
  • You don't - you'd have to buy to close your position before expiry or work out something with the other counterparty. This is again why most brokers auto-close positions close to expiry, so you don't get stuck in this position. – D Stanley Jun 29 '20 at 14:37
  • So when Oil futures price went negative it was because traders didn't want any physical delivery of crude oil as storage costs were too much .If brokers auto close their positions then why price went negative?Forgive my ignorance. – ROHAN PAUL Jun 29 '20 at 17:56

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