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Subject:
Plays on the price of oil that don't involve oil stocks
Category: Business and Money Asked by: baselnovo-ga List Price: $100.00 |
Posted:
28 Oct 2005 17:25 PDT
Expires: 27 Nov 2005 16:25 PST Question ID: 586240 |
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There is no answer at this time. |
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Subject:
Re: Plays on the price of oil that don't involve oil stocks
From: collywobbles-ga on 02 Nov 2005 07:29 PST |
It all depends on where you live. If you live in Europe you can do fixed loss spread betting which allows you to take a bet on the direction of oil at $x per point. If it goes the wrong way then you get stopped out at a certain level which you specify thus limiting your loss. www.cantorindex.co.uk and www.igindex.com are good starting points This is similar to an option although the leverage effect is not the same i.e. if you buy an out of the money call option and the price rises significantly you can make more than you would on the fixed spread bet for the same outlay. It all depends on where you think the market is heading. Options are safe enough if you buy them, the only downside is the time expiry but everything has a price ! Other alternatives would be to find companies that provide oil equipment and exploration technology (e.g Schlumberger) and those companies which provide oil derivatives and in some cases oil alternatives (rapeseed and sugar beet production) |
Subject:
Re: Plays on the price of oil that don't involve oil stocks
From: vsssarma-ga on 03 Nov 2005 17:47 PST |
COMPANIES LIKE HALLIBURTON WHICH ARE DOING HUGE IRAQ OPERATIONS MAY BE GOOD TO INVEST IF YOU NEED HUGE GROWTHS. |
Subject:
Re: Plays on the price of oil that don't involve oil stocks
From: riskarb-ga on 15 Nov 2005 15:28 PST |
"Fixed loss" spread betting is an anathema... if the spot/fwd contract gaps below your sell stop you're out of luck. Some bucket shops offer this "guarantee" but it's not worth the paper it's printed on. There aren't any direct investments outside of the option-world due to you position restrictions. The lowest risk in $-terms would involve a straight call purchase or a vertical spread. You can buy a Jan 55-60 call spread for $4.00, which offers convergence gains should oil trade neutral or higher. There are far better risk/rewards in long calendar spreads or butterflies. A back month 60-70-80 fly can be had for approx $2.00 debit. The PnL distro is algebraic; risking $2.00 with an $8.00 max return at the peak of the distribution[$70 on Crude oil futures] ... difference in strikes (-) debit paid = max gain at the center[body] strike. There are a variety of OTC/structured product options such as an exotic touch options which would reach full payout were your barrier strike reached. A EOM Dec 70 touch "call" option, paying out $1000, can be purchased for $160 today. |
Subject:
Re: Plays on the price of oil that don't involve oil stocks
From: superiormp-ga on 02 Jan 2006 07:37 PST |
You could do what is termed a 'free trade' - this involves buying options that are slightly out of the money and when the market moves in your favor, you conversely sell options at the same premium to recover your invested capital and with this capital now freed-up, you buy more option further out of the money. For free trade recommendations, check out: <a href="http://www.instantcommoditytrader.com">http://www.instantcommoditytrader.com</a>. |
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