Just a few questions about investing in oil

A

AstroDomine

Hey guys!

Though i've studied the stock market for years reading recommended books and watching the action. I never played. But now i want to get my feet wet a bit and i find myself most interested in oil.

Can the $WTIC be bought as shares in the same way you could buy shares in Google? Or does it have to be futures and options?

Could anyone point me to any posts that have a great deal of info for people wanting to invest in oil?

thanks!
 
Quote from AstroDomine:

Hey guys!

Though i've studied the stock market for years reading recommended books and watching the action. I never played. But now i want to get my feet wet a bit and i find myself most interested in oil.

Can the $WTIC be bought as shares in the same way you could buy shares in Google? Or does it have to be futures and options?

Could anyone point me to any posts that have a great deal of info for people wanting to invest in oil?

thanks!
More...

Futures:

CL (big)
QM (mini)

ETFs: (poor choice for investing)

USO
DXO

Stocks:

XOM, COP, BP, MRO ... etc.


There's a whole ET section on Energy futures ... you may want to start there.
 
Quote from AstroDomine:



Though i've studied the stock market for years reading recommended books and watching the action. I never played. But now i want to get my feet wet a bit and i find myself most interested in oil.

Can the $WTIC be bought as shares in the same way you could buy shares in Google? Or does it have to be futures and options?

Could anyone point me to any posts that have a great deal of info for people wanting to invest in oil?

thanks!
More...

Yes. You don't "play" the markets. That is called "gambling." And the best information is not to trade this or any other market until you can outperform WELL for at least SIX MONTHS on sim and them for at least a few months trading TINY AMOUNTS. And you must account for slippage, commissions, taxes, data/system fees, errors, and any other reasonable costs.

Reading recommended books is not even a decent starting point. You need serious outperformance edge(s) and superb money management skills.

Most of the things you learn from reading "other posts" is that most of these people are paper traders, dreamers or otherwise exagerrate their skills, success and knowledge.

This is very very hard and takes a long time to become a skilled trader. Even if you "arrive" you may subsequently learn about the "Risk of Ruin" the hard way
 
Quote from TraderZones:

Yes. You don't "play" the markets. That is called "gambling." And the best information is not to trade this or any other market until you can outperform WELL for at least SIX MONTHS on sim and them for at least a few months trading TINY AMOUNTS. And you must account for slippage, commissions, taxes, data/system fees, errors, and any other reasonable costs.

Reading recommended books is not even a decent starting point. You need serious outperformance edge(s) and superb money management skills.

Most of the things you learn from reading "other posts" is that most of these people are paper traders, dreamers or otherwise exagerrate their skills, success and knowledge.

This is very very hard and takes a long time to become a skilled trader. Even if you "arrive" you may subsequently learn about the "Risk of Ruin" the hard way
More...

I know. And I appreciate your warning.

I've been learning about trading(and doing paper trades) off and on since 1998.
I'm not trying to jump in and day trade. I just want to make a couple long terms trades. Nothing wreckless and no "scared money".
 
Quote from tomahawk:



ETFs: (poor choice for investing)

USO
DXO

More...





USO would be my answer to OP.

Why do you say that USO is a poor choice? Performance? Expenses?
 
Quote from AstroDomine:

I know. And I appreciate your warning.

I've been learning about trading(and doing paper trades) off and on since 1998.
I'm not trying to jump in and day trade. I just want to make a couple long terms trades. Nothing wreckless and no "scared money".
More...

Longterm trades are just as much a guess as short term trades. Usually, the research I have seen indicates it is useless to predict more than several days out. Usually, the market has already priced in most of the news, expectations and other factors.

People thinking they know the market a few months out anyway are kidding themselves. For every one who thinks it will be lower in 4 months, is another one who thinks it will be higher. Whoever gets it right will think it is due to his savvy, when it really was just luck. The one who is wrong will try again. Wash. Rinse. Repeat.
 
Quote from donnap:

USO would be my answer to OP.

Why do you say that USO is a poor choice? Performance? Expenses?
More...

I don't know all the details, but alot of folks have been saying USO is a poor way to play crude ... something about contango and yes, I believe expenses as well. Have a look at their charts and compare.
 
USL might be a better idea than USO.

There is a Seekingalpha article about these two ETFs somewhere in the archives
 
Quote from TraderZones:

Longterm trades are just as much a guess as short term trades. Usually, the research I have seen indicates it is useless to predict more than several days out. Usually, the market has already priced in most of the news, expectations and other factors.

People thinking they know the market a few months out anyway are kidding themselves. For every one who thinks it will be lower in 4 months, is another one who thinks it will be higher. Whoever gets it right will think it is due to his savvy, when it really was just luck. The one who is wrong will try again. Wash. Rinse. Repeat.
More...

When i say long-term I mean that is my intention at the start. I'm not "attached" and will make decsions as time moves forward. I'm not going to put my money in blindly for 6-months, 1 year, etc. If there are major reversals for my initial intended time frame of course i will consider removing my money.
 
If you purely want to speculate on the price of oil, then I would say trade the CL futures. USO has a structural problem in that it has to roll over its futures exposure every month, and doing so causes it to pay up for out months and receive less for the expiring month, ie contango hurts it.\

There are many E&P stocks that more or less correlate to the price of crude. I would not use the majors, ie XOM, because they have refining, etc operations and are not as leveraged to crude prices.
 
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