But any of you readers know how I could go about purchasing a put option on the price of crude oil?
1) Needs to be an option, not a future. Hey, I’m a private investor.
2) Reasonably long term: 12 months or more if possible.
3) Well out of the money….like $70 a barrel stuff.
OK, so I’m pretty certain that the financial markets are sophisticated enough to be able to deal with all of the above. However, I have a feeling that they might only be for "professional" investors, ie, dealing in sums far larger than the £1k-£1,500 I might be willing to lay out on such a bet.
So, anyone actually know?
9 responses so far ↓
1 Kay Tie // Apr 24, 2008 at 9:30 am
Spread betting? Mind you, the forward bets on IG Index only go to July 08.
Alternatively, you could short an ETF (e.g. OILW).
2 Mark Wadsworth // Apr 24, 2008 at 10:15 am
Ask Lind Waldock, if they’re still around. Pretty decent bunch (or at least they were ten years ago when I was with them).
3 Pogo // Apr 24, 2008 at 10:52 am
Have a look at SG’s “covered warrants” - I think they’ve expanded into commodities etc.
4 Matthew // Apr 24, 2008 at 11:40 am
I’d second Kay Tie’s advice, except to add that (and I think this is really the best thing you could do, even though its probably not as leveraged as a proper future) is to buy this
http://www.etfsecurities.com/csl/short/etfs_crude_oil_sh.asp
This is a ’short crude oil etf’. For every 1% it falls in price, you gain 1%. And vice-versa. You can buy it with a normal share account.
5 Matthew // Apr 24, 2008 at 11:41 am
For some reason I missed your bit about options not futures. But I’d still look into that.
Tim adds: I was just about to add that to the last comment, having looked at it. Want a fire and forget, not one that leaves me open to margin calls.
6 Matthew // Apr 24, 2008 at 12:15 pm
I’d look at the short ETF. There aren’t margin calls - you’ll just find one day that you have no investment.
7 Dave // Apr 24, 2008 at 4:04 pm
You could try Spreadfair or even Betfair - either of them should be able to supply *someone* to act as counterparty
8 Tim Newman // Apr 25, 2008 at 3:26 am
I can get you an actual barrel if you like. You’ve gotta pick up the delivery tab though.
9 Dave Tufte // May 1, 2008 at 4:56 pm
Hillary Clinton would know: she learned all about how to do this from reading the WSJ.
Call her … I hear she’s sweet and approachable.
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