Wt Wti Crude 2x Discussion Threads

[andrewbaker] 17/3/2009 16:57

markewizaard -

Don't do recommendations as not giving any advice. You may look at ETF Securities who offer several natural gas ETF, but I wouldn't go long on natural gas just yet. Long oil right now, that's a different matter ...

[markewizaard] 16/3/2009 20:25

Hi Andrew spoke a couple of times before......iv'e just read an intresting article on bloomberg regarding the scaling back of exploration/investment/de-rigging concerning natural gas...it would seem markets are pricing in a spike late 2009 early 2010 with the possibility of prices doubling,now to the crux of the matter could you recommend a gas etf/etc many thanks

[andrewbaker] 06/3/2009 16:57

Jamesiebabie -

TLW ok, and you may want to look at oil and gas company ETF. There are several, so research to find any that may appeal, but if the oil price is to start a northwardly climb from, say, the next OPEC meet in a few days, then the oil companies may well be a forward indicator in that their share prices will move up beforehand. Again, IMHO, DYOR.

[jamesiebabie] 06/3/2009 16:12

Many thanks AB and jonwig,

I've got some research today. Never done an ETF before! Normally a shares man, done well today on TLW and should have plenty more upside.

I will not no doubt be posting on here again shortly.

[andrewbaker] 06/3/2009 15:29

Jamesiebabie -

OILB and LOIL lose out to contango, and LOIL is 2x leveraged, so watch out for down days (as they have to move back up by more each time to get back square). For a longer term hold, I'd buy USL, which is not leveraged, and holds the next 12 months oil futures so negating much of the contango drag. This is comment and not advice, IMHO, DYOR.

You may like to look at this:

[jonwig] 06/3/2009 14:07

J, the contango is flattening which will help LOIL (see second link in header) and some of the newsflow suggests you might be right.
This was posted elsewhere:

[jamesiebabie] 06/3/2009 13:22

Anyone have an opinion on OILB or LOIL? Have they bottomed? TIA I'm considering buying it through Hargreaves Lansdown for my SIPP.

[andrewbaker] 20/2/2009 20:34

Be careful about tracking oil and gas related companies as they are not a proxy for the oil price. DIG and DUG are similar (and 2x geared) ETF available on the NYSE. Last year I traded DUG which is a short on the oil sector. Whilst my short oil ETF made money, DUG lost over the same time period. The reason: oil company related shares tend to move on the perceived future of oil usage (and therefore the future oil price) whilst oil itself is priced according to what's happening now. This can be two very different stories.

However, once you know that, you can trade the companies as a forward indicator of the future, so could be in a rising market area before oil itself turns back up.

Just be sure to know what it is you are investing in, so you can trade/invest appropriately.

[blackm0nday] 19/2/2009 14:37

Thanks DD
for the info

[didierdrogba] 19/2/2009 13:08

OILS(£) and OILG($) track the Dow Jones STOXX® 600 Oil & Gas Index. The Index is designed to track the performance of the largest European companies engaged in the oil and gas sector. The index currently includes approximately 33 companies.

I use Hargreaves Lansdown for trading.

[currypasty] 19/2/2009 12:59

how, and who do you trade them with ?

[didierdrogba] 19/2/2009 12:51

Anybody tried OILG or OILS as a play on oil and gas? Leverage without messing around with rolling contracts. Both seem to have been moving up last month or so.

[machoolahan] 19/2/2009 09:06

kegs - start here

[kegs] 18/2/2009 22:04

what are you actually buying with this product ?
I have bought some despite my reticence to get involved with something I clearly dont understand. any good reference material anywhere ?

[andrewbaker] 18/2/2009 16:31

blackmOnday - I've corrected "re-buy LOIL" to "re-buy SOIL," which it should have read. SOIL is the short. As a muse and not as any recommendation, if I were holding a long oil ETF - which I am - I would wait for a short while in the hope of the price rising a little, then when it did and stopped rising, I would sell it and buy a short which would give me back some of any loss as the oil price fell back again. Then, when a real trend reversal started and the price seriously started to rise, say after stocks had been depleted and demand increased, I would re-buy either CRUD or OILB or USO or LOIL ...

[blackm0nday] 18/2/2009 16:00

Many Thanks AB.
must admit I bought in on the back of an article which apealed to me saying that it was a buy at 35, is now exactly half of that lol.
my average holding price is 21 and so am in the hole for a bit now.
serves me right for investing in something without researching properly.
It will bounce at some stage as all things do, will take a stance on whether to sell out then or hold.

[andrewbaker] 18/2/2009 13:33

blackmOnday - CRUD is not leveraged but is open to contango cost which for oil right now is high, so any drop in price is made more by the contango costs whilst you're waiting for the price to turn up.

I trade LOIL short term in the hope of getting a return from a reaction bounce in price which happens from time to time; at which point, I'll sell and re-buy SOIL. Can be, and is at the mo, hairy. One big reason for the current continuing drop is the total balls up of the Obama administration in the production and presentation of their bail-out plan for the US economy. I wanted to believe they would put forward something that at least gained a good reception, even if it didn't stack up; but they have not even managed that. IMHO the Republications sabotaged their own changes so that Obama would get in and have to deal with what was an inevitable depression. (When McCain looked a possible winner, they brought in Sara Palin and, bingo; any hope of victory was extinguised.)

[blackm0nday] 18/2/2009 08:55

Someone please tell thats not the case with CRUD.
if I buy 100 units at 25 100 at 20 and 100 at 15 then I will be down 25% when I am buying at 15 but if I continue to hold then eventually when it goes back up even if its a year I will still hold the same no of units as its not levereged and sell at whatever level I want, is this not the case????, sorry if I am being naive but guidence sought please as I DO hold.
thanks

[bobby.ifa] 17/2/2009 23:54

Can this price go to zero?

[sam125] 17/2/2009 19:38

I agree with BJED, this will be less than a dollar soon. I have lost 30% in a week and sold out. I wouldn't buy again until there is a clear upturn in oil price.

Taken from Bloomberg today:


Feb. 17 (Bloomberg) -- Crude oil fell below $35 a barrel in New York on speculation a deepening recession in the U.S., Europe and Asia will reduce fuel demand.

Oil declined as much as 8.2 percent as stocks dropped on concern banks may face ratings downgrades and further losses as economies slow. Manufacturing in New York this month fell to the lowest level since records began in 2001, the Federal Reserve Bank of New York's general economic index showed.

"We won't see the market trend higher until there is a firm belief on the part of investors that the economy is turning around," said Adam Sieminski, the chief energy economist at Deutsche Bank AG in Washington. "I don't believe the change in outlook will occur until the second half of the year."

[andrewbaker] 17/2/2009 18:35

Please no-one trade based on anything I say. I switched from SOIL to LOIL on 6 February, have taken a beating due in large part - IMHO - to the very anti feelings in the US over the bailout, and have doubled up today on LOIL in anticipation of a reversal in the oil price, albeit very short term, but enough to get me out on top, I hope. I'm either very bold and sage in holding such a view, or very stupid and chasing losses: either way, I will take what comes. As BJED states above, the conditions for a good return from LOIL are not in place right now.

[relishing] 17/2/2009 18:31

Where is $25 being predicted?

[desi99] 17/2/2009 18:29

This is going down fast. If oil is heading down to $25 as predicted then this will be $1

[bjed] 17/2/2009 17:20

this etf does well in the following conditions

1) backwardation
2) high 3-month treasury yield
3) rising oil prices

sadly all of these are failing to happen in the most spectacular fashion simultaneously :

1) 10% contango PER MONTH - probably an all time high
2) near zero treasury yields - thanks to zero base rates in the US
3) oil prices in a downtrend since july

it looks good for trading due to it's high volatility which is twice that of oil, but it's lack of ability to revert to any kind of moving average means it is heading rapidly towards a penny share !