shorting DWTI is it better than long CL?

gmax · Jan 15, 2016

I am looking for a most efficient way to get into a long WTI position that can profit from price spike in oil prices that can during next few months due to highly probable short covering or geopolitical event. What would be a better way to do it ? My idea is to short DWTI or long CL (closest contract with the following rolls) or maybe CL call options (but options look pricey though).
I really like DWTI due to it's potential volatility decay and potentially it can get to $0 if oil spikes 33% in one day. But its risk profile also scares me.
For example, DWTI is $365.27 today (Jan 15, 2016) vs $106 on Sep 9, 2015. It means DWTI increased 244% for this period of 128 days. It means risk return ration is 1 to 2.4.
Any thoughts on this? What would be your way to go long on oil with good risk return profile?

ETcallhome · Jan 15, 2016

gmax said:
I am looking for a most efficient way to get into a long WTI position that can profit from price spike in oil prices that can during next few months due to highly probable short covering or geopolitical event. What would be a better way to do it ? My idea is to short DWTI or long CL (closest contract with the following rolls) or maybe CL call options (but options look pricey though).
I really like DWTI due to it's potential volatility decay and potentially it can get to $0 if oil spikes 33% in one day. But its risk profile also scares me.
For example, DWTI is $365.27 today (Jan 15, 2016) vs $106 on Sep 9, 2015. It means DWTI increased 244% for this period of 128 days. It means risk return ration is 1 to 2.4.
Any thoughts on this? What would be your way to go long on oil with good risk return profile?

the reason CL calls look pricey is because that is the volatility that is already priced in. You are a little late to the game if you are hoping to get paid for betting on CL volatility.

Buck · Jan 16, 2016

CL posted a daily buy @ 29.37 stop is 28.92 targets 31.50

will be looking to start buying USO at 850 and will hopefully add a bit lower for a move to 11/12. this is a swing trade and a weekly buy is starting to form on my algo. has not confirmed yet

Peacebewithyou · Jan 16, 2016

I use CL for daytrading only but threw a little bit of play money in GASL on Friday. Check UWTI also. Both follow CL with high leverage (so be careful).

GarrettKimmel · Jan 18, 2016

$DWTI Hate see anyone lose $$ holding short over the long weekend is a huge bear trap. Margin cal type of a mistake

murray t turtle · Jan 19, 2016

delayed quote"Peacebewithyou said:
I use CL for..... only but threw a little bit of play money in GASL on Friday. Check UWTI also. Both follow CL with high leverage (so be careful).

%%
I almost did that, good ETF volume; the main reason i did NOT;
i like paper charts so much i realized i dont know that market @ all.

One of my favorite gas news storys is T Boone Pickens[book note] climbs up the [oil station]gas price pole to lower the gas price-oil station bids-leaded gas,LOL but true.

Peacebewithyou · Jan 19, 2016

murray t turtle said:
%%
I almost did that, good ETF volume; the main reason i did NOT;
i like paper charts so much i realized i dont know that market @ all.

One of my favorite gas news storys is T Boone Pickens[book note] climbs up the [oil station]gas price pole to lower the gas price-oil station bids-leaded gas,LOL but true.

GASL actually follows CL and not NG. Throwing a little more at it tomorrow. I feel very comfortable with long position here ..

murray t turtle · Jan 25, 2016

Worked well, for some in the[trend change; bear down to bull up]winter of 1998, early 1999; someone put it under CL chart [ CL low $10.40/+]

murray t turtle · Jan 25, 2016

gmax said:
I am looking for a most efficient way to get into a long WTI position that can profit from price spike in oil prices that can during next few months due to highly probable short covering or geopolitical event. What would be a better way to do it ? My idea is to short DWTI or long CL (closest contract with the following rolls) or maybe CL call options (but options look pricey though).
I really like DWTI due to it's potential volatility decay and potentially it can get to $0 if oil spikes 33% in one day. But its risk profile also scares me.
For example, DWTI is $365.27 today (Jan 15, 2016) vs $106 on Sep 9, 2015. It means DWTI increased 244% for this period of 128 days. It means risk return ration is 1 to 2.4.
Any thoughts on this? What would be your way to go long on oil with good risk return profile?

%%%
gMax;
Havent had time to study options much lately.

Good thinking on 33% risk return .BUT 33% down in a day is possible but not probable.For exact example, see DWTI, UWTI prospectus..... about 200 plus pages. On DIREXION DAILY,X 3 funds, they explain[520+ pages] why you could lose all.BUT they know about trends + keep about 50-75% in cash[money markets] + lots of other risk controls.33% drop in one day[@ close] is even more unlikely, if you were short, think you may cover some, OR ALL, @ 33% daily drop??? Amen and amen ;NOT a prediction.

MODERN TRADER magazine[FEB 2016, has WTI forEcast[not PREDICTIONS] of $26.84-$65-$83.
SINCE TRENDS TEND TO TREND better than most think; $10 .40 could be hit, as some in big oil feared.NOT a prediction. Even though the trend is still down for sure; when the polar bears got 80% +of downtrend all ready, dont think i would do any long CL NOW, monday,Max .