Shorting oil price?

[IHAVEAQUESTION]

Well, it looks like oil price is on the way down and I am just wondering how to benefit from it. I know I can short stocks in oil companies and hope for a downturn in the stock prices, but that's not the point. I want to short oil price not "oil company stock price". So how to do it? Option? Nymex? What? Tell me.

 

[jlbenedict]

P&N -------->

 

[mugs]

Originally posted by: jlbenedict
P&N -------->

Since when do investing questions go in P&N?

 

[Jawo]

Probably an option would be the best...but you might want to talk to a qualified broker before you decide to jump in so you won't lose your shirt!

 

[jlbenedict]

Originally posted by: mugs

Originally posted by: jlbenedict
P&N -------->

Since when do investing questions go in P&N?

I figured since its related to oil, this thread will eventually go in that direction

But hey... I guess we'll give this thread a chance

 

[JS80]

you need at least $10k to open a futures account. And no, you don't short oil companies.

You can short USO, it's a oil futures tracking stock.

 

[razor2025]

I don't think you want to short oil. It'll bottom out @ $2/gal (or ~$60/ barrel) and shoot back up again once Xmas shopping season starts. (Not to mentoin the increase in home heating once the cold really sets in).

 

[JS80]

Originally posted by: razor2025
I don't think you want to short oil. It'll bottom out @ $2/gal (or ~$60/ barrel) and shoot back up again once Iran starts talking shvt. (Not to mentoin the increase in home heating once the cold really sets in).

fixed

 

[BrownTown]

yeah, oil isnt gonna be going down for much longer. Also, personally I wouldnt want my money in something so volitile. Something happens to supply and oild jumps way up again and your gonna lose serious money.

 

[IHAVEAQUESTION]

Originally posted by: JS80
you need at least $10k to open a futures account. And no, you don't short oil companies.

You can short USO, it's a oil futures tracking stock.

Is USO for crude oil for oil in general? like heating and other types?

 

[Specop 007]

Commodities. Wow, your a braver man then me.

 

[Feldenak]

Originally posted by: IHAVEAQUESTION

Originally posted by: JS80
you need at least $10k to open a futures account. And no, you don't short oil companies.

You can short USO, it's a oil futures tracking stock.

Is USO for crude oil for oil in general? like heating and other types?

USO = U.S. Oil

 

[JS80]

Originally posted by: IHAVEAQUESTION

Originally posted by: JS80
you need at least $10k to open a futures account. And no, you don't short oil companies.

You can short USO, it's a oil futures tracking stock.

Is USO for crude oil for oil in general? like heating and other types?

The investment seeks to reflect the performance, less expenses, of the spot price of West Texas Intermediate (WTI) light, sweet crude oil. The fund will invest in futures contracts for WTI light, sweet crude oil, other types of crude oil, heating oil, gasoline, natural gas and other petroleum based-fuels that are traded on exchanges. It may also invest in other oil interests such as cash-settled options on oil futures contracts, forward contracts for oil, and OTC transactions that are based on the price of oil. The fund is nondiversified.

 

[dullard]

I'd like to rephrase your first sentence:

Well, it looks like the oil price WENT down 20%. I missed the move. I hope to jump on the bandwagon late and catch the very last bit of the wave. I know I can short stocks in oil companies and hope for a downturn in the stock prices, but that's not the point...

 

[tweakmm]

If you have to ask...

Investing in options is a great way to lose everything.

 

[JS80]

Originally posted by: tweakmm
If you have to ask...

Investing in derivatives is a great way to lose everything.

fixed

 

[IHAVEAQUESTION]

Ok, I see that USO is a ETF so it trades in all kinds of oil. I guess it's one step closer to reflect the drop in oil price than stocks in oil companies, but the problem is I don't know how other oil will do in the next few months...

What about future contract like option? If I can't short crude oil price directly, I want to get as close to it as possible. I hope you guys are getting where I am going with this.

 

[Specop 007]

Originally posted by: IHAVEAQUESTION
Ok, I see that USO is a ETF so it trades in all kinds of oil. I guess it's one step closer to reflect the drop in oil price than stocks in oil companies, but the problem is I don't know how other oil will do in the next few months...

What about future contract like option? If I can't short crude oil price directly, I want to get as close to it as possible. I hope you guys are getting where I am going with this.

I think the only place your going is to the theives den, and I cant imagine the trip is going to be what you expect.

Good luck.

 

[dullard]

Originally posted by: IHAVEAQUESTION
I don't know how other oil will do in the next few months...

If I can't short crude oil price directly, I want to get as close to it as possible.

1) Why do you think you know where US oil prices will go?
2) Why do you think you know where US oil will go but not where other oil will go?
3) Why do you want to get as close to oil as possible?

 

[EKKC]

Originally posted by: JS80
you need at least $10k to open a futures account. And no, you don't short oil companies.

You can short USO, it's a oil futures tracking stock.

shorting oil != shorting oil companies

it is true that each oil prices per barrel has dropped, but that doesnt mean oil companies and drillers will not be profitable.

they would never sell you gasoline at a loss. even at a $2.60/gal or whatever it is now, the government is still taking that 18% tax and the oil companies are still taking in whatever the hell percentage that they add.

if you had to ask this question OP. investing is not for you.

 

[JS80]

Originally posted by: IHAVEAQUESTION
Ok, I see that USO is a ETF so it trades in all kinds of oil. I guess it's one step closer to reflect the drop in oil price than stocks in oil companies, but the problem is I don't know how other oil will do in the next few months...

What about future contract like option? If I can't short crude oil price directly, I want to get as close to it as possible. I hope you guys are getting where I am going with this.

1) With futures options I almost guarentee you will lose 100% of investment
2) With straight futures, your loss potential is greater than your initial investment

If you're REALLY REALLY REALLY bearish on oil, short USO.

 

[IHAVEAQUESTION]

Originally posted by: EKKC

Originally posted by: JS80
you need at least $10k to open a futures account. And no, you don't short oil companies.

You can short USO, it's a oil futures tracking stock.

shorting oil != shorting oil companies

it is true that each oil prices per barrel has dropped, but that doesnt mean oil companies and drillers will not be profitable.

they would never sell you gasoline at a loss. even at a $2.60/gal or whatever it is now, the government is still taking that 18% tax and the oil companies are still taking in whatever the hell percentage that they add.

if you had to ask this question OP. investing is not for you.

Err...maybe you should re-read my original post?

 

[Slew Foot]

The problem with shorting oil is that the next time a camel trips over a pipeline in Afganistan, the price rockets up. I personally think something insidious is in play and prices will shoot up again after the election due to "winter oil demand".

 

[IHAVEAQUESTION]

Originally posted by: JS80

Originally posted by: IHAVEAQUESTION
Ok, I see that USO is a ETF so it trades in all kinds of oil. I guess it's one step closer to reflect the drop in oil price than stocks in oil companies, but the problem is I don't know how other oil will do in the next few months...

What about future contract like option? If I can't short crude oil price directly, I want to get as close to it as possible. I hope you guys are getting where I am going with this.

1) With futures options I almost guarentee you will lose 100% of investment
2) With straight futures, your loss potential is greater than your initial investment

If you're REALLY REALLY REALLY bearish on oil, short USO.

Well, I am just trying to figure out a way to benefit DIRECTLY from the fluctuation of the crude oil price. Yes, I am bearish on crude oil but not oil in general (at least not yet).