Is UGA a good vehicle to bet on gasoline price recovery?

[laurie]

Hi,
I am new to the forum.
I have been looking at UGA as a potential vehicle to trade gasoline prices. I know it has a structure similar to the disastrous USO, holding only the near month gasoline futures which in steep contango means that they have to roll over every month into a more expensive contract.
On the plus side, gasoline supply contracted very fast from close to 10M bpd to about 6M bpd which is pretty close to the current gasoline demand. Therefore, the gasoline storage problem is not as acute as the crude storage problem which is getting worse by the day. Does this make a difference for UGA?
And if not UGA, what else could be a good trading vehicle for gasoline prices?

 

[Genevian Speculator]

why would you ever bet on oil? why? is there any reason to it? Yes prices may rise but as noninstitutional all you can do with oil is lose.

 

[laurie]

Genevian, this is not a bet on oil but gasoline. I wonder if refineries may actually benefit from the current situation because the gasoline consumption will start recovering while the oil glut will continue for a while. The crack spread should widen in their favor.

 

[maxinger]

how about

RBOB Gasoline futures from NYMEX ?

 

[unconventional wisdom]

how about

RBOB Gasoline futures from NYMEX ?

and 3 weeks from now laurie will post, " how to accept delivery of 10K gallons of gasoline? ".

keep it simple - buy and hold oil and gas companies - RDS, XOM, COP, BP, etc, etc, etc

 

[laurie]

and 3 weeks from now laurie will post, " how to accept delivery of 10K gallons of gasoline? ".

keep it simple - buy and hold oil and gas companies - RDS, XOM, COP, BP, etc, etc, etc

A week later Laurie is sorry for not getting in this trade. Could have been easy 30% in 5 days. Lesson learned.

 

[bone]

You only have yourself to blame. Hopefully the lesson in part is to not post on a website forum looking for advice from knuckleheads.

A week later Laurie is sorry for not getting in this trade. Could have been easy 30% in 5 days. Lesson learned.

 

[laurie]

You only have yourself to blame. Hopefully the lesson in part is to not post on a website forum looking for advice from knuckleheads.

Bone, I think I will frame your answer and put it on the wall in my office. Seriously!

 

[bone]

Bone, I think I will frame your answer and put it on the wall in my office. Seriously!

These days you can buy 100 shares of a stock. Trust yourself and have a little confidence. If you are trading small you can experiment with your conviction. From little acorns grow big oak trees.

Just stay away from stuff like futures unless you really know what you are doing. In the right hands and with the right strategy futures are wonderful and indispensable. But ruinous in the wrong hands.

 

[beatles]

it still has some contango.
uga these are for trading only.
the niave public were buying these USO and UWT without reading the SEC prospectus saying these are not buy and hold securities and you don't own any commodity.
yet people average down and continue to hold it.
they were created mainly for short term trading. for people with no futures account. in the long term, the contango or 3% -5% monthly decay will take away any gains in the commodity appreciating in price.
even if natural gas goes to $3,,,these 'investors' of these commodity ETF gain nothing and even lose money===that is dumb money. like the USO and UWT
they delisted the UWT when oil is at 20 year low. go figure that out.
also, oil was at $1-$10 and the market shake out all bottomfish buyers
nobody is selling oil at $10/barrel. Even saudi arabia will not sell oil for less than $10/barrel
here is theory of capitalism, people don't sell stuff at a loss for long.
if people do not make money doing something, the service cease to exist.--that is capitalism
the fact that price oil rebounded from .01/barrel to $25/barrel in two weeks shows the market and capitlism 'works'