Oil/Energy ETF's

texrex2002 · Feb 18, 2009

I like FNARX, but I took quite the beating on it last year.

newguy05 · Feb 18, 2009

Quote from efficiency:

Broken, no. You're on the wrong side of a contango as the underlying futures contracts are rolled over. Each succeeding expiration is about 5 bucks apart (higher). This is "by design" because of the sheer volume of USO comprised of amateurs seduced by a bargain.

Until the contango works in your favor, you're apt to lose money. USO's next roll over is March 6th.

You might fare a little better in USL but neither is appropriate to be long presently.

if not uso, what do you recommend then if i want to make along term play on purely oil (ie: not oil companies).

How about shorting the dto instead?

MacDRider · Feb 18, 2009

Quote from mindmerge2k:

im having trouble understanding dxo. the correlation 2x supposedly with the crude oil movement doesnt seem to be correct many days.

With DXO you have to look not at the current contract, but the forward month. So for now, DXO moves according to the April contract (which expires March 20th).

On the 2nd-6th of every month, DXO is moved by 20% per day to the following month's contract. So by March 7th, for example, it will be trading on the May futures contract. Then if that contract keeps going down in value, DXO will keep going up.

Here is yahoo's page on the April futures contract.

jkerviel · Feb 19, 2009

I tried shorting DTO at $250 yesterday but couldn't get any stock with IB.

JB3 · Feb 19, 2009

Now is not the time to be in oil. Wait until the supply and demand numbers go in your favor. OPEC will need to cut production, and then it'll still take some time to work off the excess of supply currently in the system. The numbers might not swing favorable for months or years.

One thing is for sure, you do not want to be in USO right now. It is not the right play for oil in the long term.

efficiency · Feb 19, 2009

Quote from newguy05:

if not uso, what do you recommend then if i want to make along term play on purely oil (ie: not oil companies).

How about shorting the dto instead?

I don't recommend, I dissuade.

I did mention UAG. Gasoline. Head & shoulders bottom (but ONLY on a point & figure chart).

As for oil, USL rolls over differently. Research it. However, volume is a mere fraction of USO. Hence wider spreads.

You seem do be itchin' for action. Isn't that FORCING a trade where none's there? (Presently).

Totally unrelated, I believer there's a secular change transpiring in long treasuries (the volatile end of the yield curve and comprised of a Japanese and Chinese presence). Probably unlike you, I remember 1981 (a year before the bull in equities). That would be eh.....recommendation.

murray t turtle · Feb 19, 2009

Quote from efficiency:

Broken, no. You're on the wrong side of a contango as the underlying futures contracts are rolled over. Each succeeding expiration is about 5 bucks apart (higher). This is "by design" because of the sheer volume of USO comprised of amateurs seduced by a bargain.

Until the contango works in your favor, you're apt to lose money. USO's next roll over is March 6th.

You might fare a little better in USL but neither is appropriate to be long presently.

==================
a]Also USO[fund] has discretion to use 10% to buy gasoline, nat gas...;
so it NEVER was designed to track crude contracts exactly[see prospectus]
=========================================
b]I would agree, with thee, effoiciency-
& seldom make a countertrend comment. But while i did call Citigroup buying a 2009 tanker full of oil probably '' bearish''[see previous posts].
Technicaly some 2009 buys looked good ,& also tankers full done by buyers/longs,in 2009 were done perhaps wisely,by Shell Oil Co, MS.

c]Counter -trends i seldom do,[long USO,DXO is countertrend until it closes above 50dma/trend ] simply because i like the percentages that favor Trends. So Citigroup buying oil in 2009 maybe wrong;Shell Oil & Morgan Stanley doing the same maybe profitable.
%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

PS -if one keeps record of his counter -trend profits;
compared to trend profits, you will see why i seldom make a counter-trend call.

midniteeuropa · Feb 19, 2009

sorry for lame question...but what does contango and "5 bucks" apart mean ?

if now is not a good time to get in, then when would u suggest to get in ?

thanks for the help and information

Quote from efficiency:

Broken, no. You're on the wrong side of a contango as the underlying futures contracts are rolled over. Each succeeding expiration is about 5 bucks apart (higher). This is "by design" because of the sheer volume of USO comprised of amateurs seduced by a bargain.

Until the contango works in your favor, you're apt to lose money. USO's next roll over is March 6th.

You might fare a little better in USL but neither is appropriate to be long presently.

Trader666 · Feb 19, 2009

No. DXO uses the June light crude contract.

http://www.powersharesetns.com/products/crudeoil/

Quote from MacDRider:

With DXO you have to look not at the current contract, but the forward month. So for now, DXO moves according to the April contract (which expires March 20th).

On the 2nd-6th of every month, DXO is moved by 20% per day to the following month's contract. So by March 7th, for example, it will be trading on the May futures contract. Then if that contract keeps going down in value, DXO will keep going up.

Here is yahoo's page on the April futures contract.

Trader666 · Feb 19, 2009

If you want volatility, try UCO.

Quote from sbn:

Hi everyone,
With the price of oil definitely not stay where it is, which ETF is the best positioned to capture the gains of a rising oil price? XLE is the first ETF that comes to mind. Any thoughts on this.

Thanks,

sbn