Best Way to Buy Oil
- Thread starter datamerc
- Start date
Quote from datamerc:
I've come to see there's plenty of avenues to get into this (and many above my head). But I just want the simplest, least expensive way to get a barrel of oil (other than physical) and let it run for the long term (1 year min).
Futures Call option: if you look at December '09 Light Sweed Crude. it's trading at around $55 per barrel. A futures contract represents 1,000 barrels, so every dollar move ($55 to $56 for example) is an equuity swing of $1,000 ($1 x 1,000 barrels). If you are confident that buy next December (roughtly) the price of Crude is going to be back over $100 you might look into buying a December '09 Crude $100 Call. Looks like that strike/month is at about $2,000. Wost case is Crude price don't move much and you're out the $2,000. Even if futures don't get back over $100 you could still make money if prices spike higher. This is a real simplistic explanation but I think you can see it's not super complicated. Talk to a commodity broker for a better explanation.
We are going to see the pace at which US assets are bought by foreign interests accelerate. This is one way of hedging against declining purchasing power of US currency and what many, myself included, believe will be severe inflation in the US economy several years hence. The best time to buy these assets will be in the deflationary period, now through perhaps 2011.
tradersboredom
Guest
storing oil has storage cost etc
only way these oil etf would long oil is futures market.
there is few open interest past 6 months in the oil futures market.
only way these oil etf would long oil is futures market.
there is few open interest past 6 months in the oil futures market.
I am interested too....
I couldnt find clear description of risks associated with buying DXO on the Deutche web. That what it says:
"An investment in the PowerShares DB Crude Oil ETNs involves risks, including possible loss of principal. For a description of the main risks, see "Risk Factors" in the applicable pricing supplement."
http://dbfunds.db.com/notes/Oil/index.aspx
where is that "Risk Factors" section in the applicable pricing supplement they talk about?
can somebody, if has time, explain how the 'contango effect' sets into pricing........
I couldnt find clear description of risks associated with buying DXO on the Deutche web. That what it says:
"An investment in the PowerShares DB Crude Oil ETNs involves risks, including possible loss of principal. For a description of the main risks, see "Risk Factors" in the applicable pricing supplement."
http://dbfunds.db.com/notes/Oil/index.aspx
where is that "Risk Factors" section in the applicable pricing supplement they talk about?
can somebody, if has time, explain how the 'contango effect' sets into pricing........
tradersboredom
Guest
all these ETF oil commodity are sold like regular shares fo a corporation.
these ETF can just shut down return money to investors etc
buying oil company stock is same thing, you won't lose any 20% if oil stays the same price.
these ETF can just shut down return money to investors etc
buying oil company stock is same thing, you won't lose any 20% if oil stays the same price.
tradersboredom
Guest
guys running these commodity or any ETF are probably making money on some spread or just collecting fees without doing anything.