Is there a way to invest in crude oil?

[MitchT]

I was wondering if there was a way that I could profit from crude-oil price rises. I realise that spread-betting offers crude oil, but I would prefer something that enables me to invest all of the sum over the whole of the underlying asset rather than being leveraged. Spread betting also works in contracts with expiry dates whereas I'd prefer something that was simply ongoing until I withdrew my cash. Is there such a thing as a crude oil tracker - ie, like an index tracker but tracking crude oil instead?

I have tried spread-betting for various things but I've only really broken-even over the many years that I've been doing it - mainly because I simply don't have the quantity of cash required to set stops that are large enough to get me through the 'noise', so I end losing as much on trade where I called it right but got stopped-out by fluctuations prior to the market going where I had predicted, as I win when it goes immediately in the direction that I predicted. I'd need mega-bucks for crude because the intra-day volatility is so huge and the SB companies don't offer small enough bet sizes - I'd need a company that would let me do about 10p/tic to be able to survive the volatility of crude!

[Plotloss]

This was mentioned earlier in another thread.

Apparently you can buy crude stocks but the min investment is £50K

[MitchT]

Plotloss said:

Apparently you can buy crude stocks but the min investment is £50K

Damn! I was thinking more like £5k. If I had £50k I'd bugger off to France and make wine.

[Loafer]

i believe there are exchanged traded funds that track crude oil

[Fittster]

Maybe an ETF would be the right approach.

http://www.etfsecurities.com/csl/etfs_crude_oil.asp 

[Simpo Two]

MitchT said:

the volatility of crude!

Crude oil isn't very volatile - you have to refine it first

[Horse_Apple]

MitchT said:

I was wondering if there was a way that I could profit from crude-oil price rises. I realise that spread-betting offers crude oil, but I would prefer something that enables me to invest all of the sum over the whole of the underlying asset rather than being leveraged. Spread betting also works in contracts with expiry dates whereas I'd prefer something that was simply ongoing until I withdrew my cash. Is there such a thing as a crude oil tracker - ie, like an index tracker but tracking crude oil instead?

I have tried spread-betting for various things but I've only really broken-even over the many years that I've been doing it - mainly because I simply don't have the quantity of cash required to set stops that are large enough to get me through the 'noise', so I end losing as much on trade where I called it right but got stopped-out by fluctuations prior to the market going where I had predicted, as I win when it goes immediately in the direction that I predicted. I'd need mega-bucks for crude because the intra-day volatility is so huge and the SB companies don't offer small enough bet sizes - I'd need a company that would let me do about 10p/tic to be able to survive the volatility of crude!

ETFs.

[Timmy33]

There are also ETFs which enable you to short oil too, should you so desire.

[NoelWatson]

MitchT said:

I have tried spread-betting for various things but I've only really broken-even over the many years that I've been doing it - mainly because I simply don't have the quantity of cash required to set stops that are large enough to get me through the 'noise', so I end losing as much on trade where I called it right but got stopped-out by fluctuations prior to the market going where I had predicted, as I win when it goes immediately in the direction that I predicted.

So you genuinely believe theat the reason you haven't made money in the past is because you haven't had enough money to set large enough stops?

[Timmy33]

NoelWatson said:

MitchT said:

I have tried spread-betting for various things but I've only really broken-even over the many years that I've been doing it - mainly because I simply don't have the quantity of cash required to set stops that are large enough to get me through the 'noise', so I end losing as much on trade where I called it right but got stopped-out by fluctuations prior to the market going where I had predicted, as I win when it goes immediately in the direction that I predicted.

So you genuinely believe theat the reason you haven't made money in the past is because you haven't had enough money to set large enough stops?

It seems perfectly possible to me.

Take a $/£ bet. Lets say you think that the rate will be $1.70 in a years time, and put a bet on at $1.95 in March.

We've been all the way upto $1.99 since, and are now back down to around $1.96.

Unless you can afford to set a stop loss at say $2.15 you may well have difficuly in staying in the market, even though in 12mths time you're position trade may well have been correct.

With commodities it's even worse because they're so volatile.

[NoelWatson]

Timmy33 said:

NoelWatson said:

MitchT said:

I have tried spread-betting for various things but I've only really broken-even over the many years that I've been doing it - mainly because I simply don't have the quantity of cash required to set stops that are large enough to get me through the 'noise', so I end losing as much on trade where I called it right but got stopped-out by fluctuations prior to the market going where I had predicted, as I win when it goes immediately in the direction that I predicted.

So you genuinely believe theat the reason you haven't made money in the past is because you haven't had enough money to set large enough stops?

It seems perfectly possible to me.

Take a $/£ bet. Lets say you think that the rate will be $1.70 in a years time, and put a bet on at $1.95 in March.

We've been all the way upto $1.99 since, and are now back down to around $1.96.

Unless you can afford to set a stop loss at say $2.15 you may well have difficuly in staying in the market, even though in 12mths time you're position trade may well have been correct.

With commodities it's even worse because they're so volatile.

I must be missing something obvious here, but why couldn't you bet a smaller amount per point?

[Timmy33]

NoelWatson said:

I must be missing something obvious here, but why couldn't you bet a smaller amount per point?

Most only let you bet amounts down to £1 a point, which means the minimum you can bet on crude is £12500 right now.

Which means a £1 bet short crude from 10 days ago would currently be down around £1500. He might not have that much stake money. It might go to $150 by the end of the month, before correcting back down, who knows?

[clubsport]

I have been playing around in oil in recent months,,,,,price action of the last few days and weekly reserve figures,,,sort of give the impression the oil price may have run out of upside momentum for now,,,,,if you are looking to buy/invest...there may be better opportunities for location than right now!


the price of commodities can go up, down or even stay the same, the above statement carries no gurantees!

[Plotloss]

clubsport said:

I have been playing around in oil in recent months,,,,,price action of the last few days and weekly reserve figures,,,sort of give the impression the oil price may have run out of upside momentum for now,,,,,if you are looking to buy/invest...there may be better opportunities for location than right now!


the price of commodities can go up, down or even stay the same, the above statement carries no gurantees!

:insertsbabelfishredbracesedition:

Are you saying now is the time to short oil?

I can never be sure you see.

[Timmy33]

clubsport said:

I have been playing around in oil in recent months,,,,,price action of the last few days and weekly reserve figures,,,sort of give the impression the oil price may have run out of upside momentum for now,,,,,if you are looking to buy/invest...there may be better opportunities for location than right now!


the price of commodities can go up, down or even stay the same, the above statement carries no gurantees!

[clubsport]

Plotloss said:

clubsport said:

I have been playing around in oil in recent months,,,,,price action of the last few days and weekly reserve figures,,,sort of give the impression the oil price may have run out of upside momentum for now,,,,,if you are looking to buy/invest...there may be better opportunities for location than right now!


the price of commodities can go up, down or even stay the same, the above statement carries no gurantees!

:insertsbabelfishredbracesedition:

Are you saying now is the time to short oil?

I can never be sure you see.

that would be a cute way to play things at the moment, of course there is an unbalanced event risk......as in a terrorist type event is always a threat to higher prices...on that basis, I wouldn't sell calls here or remove the oil from your Saab as a way of getting short!

I must say you are getting the hang of this city-blag thing Plotters!

[Horse_Apple]

clubsport said:

Plotloss said:

clubsport said:

I have been playing around in oil in recent months,,,,,price action of the last few days and weekly reserve figures,,,sort of give the impression the oil price may have run out of upside momentum for now,,,,,if you are looking to buy/invest...there may be better opportunities for location than right now!


the price of commodities can go up, down or even stay the same, the above statement carries no gurantees!

:insertsbabelfishredbracesedition:

Are you saying now is the time to short oil?

I can never be sure you see.

that would be a cute way to play things at the moment, of course there is an unbalanced event risk......as in a terrorist type event is always a threat to higher prices...on that basis, I wouldn't sell calls here or remove the oil from your Saab as a way of getting short!

I must say you are getting the hang of this city-blag thing Plotters!

You could buy puts though;)

Or, short the futures with a bit of a hedge on the side with options to try and cover against any really silly upward spikes.

Overall, the trend still appears to be firmly upwards so I would rather wait for a sell off and then go long again.

[Timmy33]

Horse_Apple said:

Overall, the trend still appears to be firmly upwards so I would rather wait for a sell off and then go long again.

Could go long the oil majors, and short the crude future.

[Horse_Apple]

Timmy33 said:

Horse_Apple said:

Overall, the trend still appears to be firmly upwards so I would rather wait for a sell off and then go long again.

Could go long the oil majors, and short the crude future.

True, but wouldn't you need to research the hedging strategies of each company, or do you reckon they are running open exposure in this climate?. I like the idea of options on hedging as it fixes the cost. We could also look to hedge out the Cable exposure?

By far the easiest solution is a daily spread bet on the fut. Staggered entry positions with trailing stops and just build a bigger and bigger position, locking in profits and using those unrealised gains as innitial margin on the next position.