71 on shorting oil

[il Padrino Ute]

Am I the only one who really doesn't like to talk about short anything when it comes to personal assets? Or am I the only honest one here?

[BYU71]

Originally Posted by il Padrino Ute

Am I the only one who really doesn't like to talk about short anything when it comes to personal assets? Or am I the only honest one here?

Maybe that is because they are so short they don't even qualify as an "asset".

[il Padrino Ute]

Originally Posted by BYU71

Maybe that is because they are so short they don't even qualify as an "asset".

That could very well be.

I've learned to live within my means and doing so is helping me plan for retirement.

[BYU71]

Originally Posted by il Padrino Ute

That could very well be.

I've learned to live within my means and doing so is helping me plan for retirement.

Oh, I thought you were referring to a short asset you pack around with you.

I would never make a comment about your financial assets. That is a very personal thing with everyone and not how I would measure someone's worth anyway.

Thought you were being funny and I was trying to be in return. Sorry.

[il Padrino Ute]

Originally Posted by BYU71

Oh, I thought you were referring to a short asset you pack around with you.

I would never make a comment about your financial assets. That is a very personal thing with everyone and not how I would measure someone's worth anyway.

Thought you were being funny and I was trying to be in return. Sorry.

Uhhh, yeah, I was talking about finances.

Innuendo, my friend. Innuendo.

[BYU71]

Originally Posted by BYU71

I stepped out today. Something looked weird. Crude down and this was down. How the hell is crude going down and I am short it and I am losing value.

Checked it out in more detail. This is tied somehow to the oil stocks in the Dow or the Dow oil index or something like that. It follow oil stocks though and they were up.

I got out. It is OK, I made $300 bucks after commissions, but I was up $600 after yesterday. Not bad for not knowing what the heck you were invested in.

Woulda, coulda, shoulda. Didn't ever find something I was comfortable with as a proxy for oil going down. Although these weren't what I was looking for, should have held on. Price on them now is $42.92. Oil is below 90.

Oh well. It is nice to make a decent call. It is a hell of a lot better to actually put money where ones mouth is after making the call.

[BYU71]

Originally Posted by BYU71

Woulda, coulda, shoulda. Didn't ever find something I was comfortable with as a proxy for oil going down. Although these weren't what I was looking for, should have held on. Price on them now is $42.92. Oil is below 90.

Oh well. It is nice to make a decent call. It is a hell of a lot better to actually put money where ones mouth is after making the call.

Another piece of good advice is when you have done something, don't look back and think about what you should have done. Price on the oil short is now $48. That is only up 33% in a couple of weeks.

Damn, damn, damn, damn.

[FMCoug]

Originally Posted by BYU71

I am checking into that . I don't do commodities and never have, so I am totally in the dark there.

There is an ETF that tracks oil. The symbol is USO. One could short that stock, but it would tie up a good chunk of change. You can also buy put options on the ETF, but the premiums look expensive. I only looked at the ones 3 months out. I wouldn't buy those personally.

I got busy taking care of a few clients and didn't really follow up.

I get a feel for when we are near a high and I think we are there. My problem is that feeling can be a year premature. I sold my clients out of Cisco for example in 1999 at $56. They weren't too happy when it kept going up to $72 in 2000. We had bought it at $9, I thought $56 was good enough and the COMP was way over priced at 4200. Of course it went to 5000.

About a year and a half ago I thought housing and real estate was over priced. I am early on this stuff and that is why I mentioned I need to find something I can hold for at least a year for this to work.

Just looked and there is action on USO puts as far out as July. The July 68 puts have some decent open interest and closed at 2.94.

However, doesen't USO track oil company stocks, not the commodity itself? I don't know jack about commodities.

[jay santos]

Originally Posted by FMCoug

Just looked and there is action on USO puts as far out as July. The July 68 puts have some decent open interest and closed at 2.94.

However, doesen't USO track oil company stocks, not the commodity itself? I don't know jack about commodities.

So July 68 meaning oil price of $68 by July? If so, that's what I was talking about. I bet if there were one year puts they'd be as low as $50.

[BYU71]

Originally Posted by jay santos

So July 68 meaning oil price of $68 by July? If so, that's what I was talking about. I bet if there were one year puts they'd be as low as $50.

No, the USO is trading at $76.62 this morning. Oil is up $1.98 and USO is up $1.13. So they don't track exactly. One is up 2% and the other is up 1.5%.

The July 68's are at $3.20 on the ask side. If you held the option until expiration, you don't make money until the USO drops below 64.80. or a drop of 13.43%. Using the 1.5 to 2 ration, that would mean crude would have to drop over 18% or to $79 a barrell.

I don't know if this makes any sense. If it is confusing the first time through, it probably will be everytime through and I wouldn't try to figure it out.