Wish I’d actually gone ahead with some of these suggestions now.
Oil back in April/May was around the $115-$120 mark. It’s now under $40. And I was looking for a put option at about $70. To put say £1,500 into.
If I’d actually done it I’d be able to buy a pub by now I think (although it’s true that pubs have also fallen in value).
Although, to be more reasonable, I don’t think I could have actually done such a transaction anyway.
9 responses so far ↓
1 Dr Nick Ashley // Jan 2, 2009 at 1:04 pm
I wonder what those Somali prates are thinking re ‘their’ oil tanker and it’s soon to be worthless cargo?
2 Kay Tie // Jan 2, 2009 at 1:51 pm
Why couldn’t you have done the transaction? IG Index et al offer low cost spread-betting, which amounts to the same thing.
Tijm adds: I don’t like spread betting….margin calls makes it more like futures than options. I wanted to have a loss limitation.
3 Tim Newman // Jan 2, 2009 at 2:17 pm
I think it’s gonna be at about $55-$60 per barrel at the end of 2009.
4 ZT // Jan 2, 2009 at 4:55 pm
I wish I’d sold Lehman short. I wish I’d bet all my money on Obama winning. I wish I had a time machine, so I could place all these winning bets with no risk.
5 Kay Tie // Jan 2, 2009 at 5:52 pm
“margin calls makes it more like futures than options. I wanted to have a loss limitation.”
You can use guaranteed stop losses.
http://www.igindex.com.au/spread-betting/as_risk_management.html
Disclaimer: I don’t do spread-betting. I looked into it as a cheap way of doing currency hedging (which it is) but my need to do the hedging went away.
6 Kay Tie // Jan 2, 2009 at 6:05 pm
“I think it’s gonna be at about $55-$60 per barrel at the end of 2009.”
Since Brent oil just jumped by 20% today, I think you might be right.
7 Colin Suttie // Jan 2, 2009 at 7:07 pm
You most certainly could have done such a transaction – there’s an ETF specifically set up to track oil prices (USO is the ticker), and there are options on the ETF. I was thinking along similar lines around the same time, and only wish I’d had the courage of my convictions at the time.
8 Kay Tie // Jan 2, 2009 at 10:45 pm
“there’s an ETF specifically set up to track oil prices (USO is the ticker)”
There’s quite a few, actually. USO is a US-listed ETF and my broker doesn’t even list it, let alone trade it. The OILW and OILB are the UK-listed ETFs tracking oil.
But these are based on rolling options contracts, and tend to underperform. A better track to oil prices is to invest in an oil services companies tracker (ticker IEZ). There’s a good article on this topic here:
http://www.marketoracle.co.uk/Article8024.html
9 matthew // Jan 3, 2009 at 11:09 am
well for what its worth i did buy the uk short oil etf at about 130 a barrel, panicked a bit at 147, then was mightily pleased when it fell towards 90. Until trading was suspended as aig, the counterparty, almost collapsed. The us government rescued us and i sold out at 50 so a return of about 2.5 times. Theres a lot of useful investment experience there. Btw its now fully collateralized so at least that cant happen again.
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