Buying crude oil futures???

broncosbybart

broncosbybart

Is it 5 YET?
Joined
May 15, 2008
Location
Charlotte, NC
I'm in the dark on trading anything. Haven't invested in the market as it is pushing new highs. The gas prices right now will probably go nowhere but up. Any advice is much appreciated!!
 
Futures is not where you want to start trading.

The ETFs (UWTI, etc) are a fair substitute, but they decay, so not for a long-term hold. It's a momentum vehicle. Buy at a good technical entry point, sell 1-5 days later. You can lose your ass in a big hurry, and the gaps mean your stop loss is useless. Might have another good entry in the next day or so, though.
 
I'm more of an investor than a trader. I typically hold things for weeks or months instead of days or hours. I've been waiting for oil to go a little lower before I buy. I plan on buying XLE and also possibly USO or OIL. I'm looking for $40 as an entry point, but might start buying some if it hits $45. I haven't been keeping with the oil news as much lately as I was a few weeks and more ago.
 
The first questions I ask all my clients is what is the GOAL for this money? Is it Harrah's gambling money or does it need to be used as a savings vehicle for needs down the road.

If you really want to try your hand at Day trading, it is a full time job.

PM'd for advise
 
Thanks for the replies guys. I really don't know what I'm doing. It sounds like futures are definitely not for me. I'd like to somehow take advantage of oil while it is low and sell it when it goes back up. Well, doing something short of buying 1000 barrels and sitting them in the back yard...
 
broncosbybart said:
Thanks for the replies guys. I really don't know what I'm doing. It sounds like futures are definitely not for me. I'd like to somehow take advantage of oil while it is low and sell it when it goes back up. Well, doing something short of buying 1000 barrels and sitting them in the back yard...
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I know nothing about trading, but I agree with @EdJonesJeeper. I worked for a building contractor/day trader, he spent way more time on his computer watching the red and greens lines go up and down than he was on the job site. I would say 90% of his day was on the computer.
 
by the way. this is exactly why the price of oil is unstable and unnaturally high. unless you are an oil consumer you shouldnt be allowed to buy oil. and, no the 1 qt a month your tow rig burns doesnt count.
 
Reid said:
by the way. this is exactly why the price of oil is unstable and unnaturally high.
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Just so we're all clear -- you're saying that the price of crude TODAY is unstable and unnaturally high?
 
I think oil may go lower. That is all.
 
Reid said:
by the way. this is exactly why the price of oil is unstable and unnaturally high. unless you are an oil consumer you shouldnt be allowed to buy oil. and, no the 1 qt a month your tow rig burns doesnt count.
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Agreed, too many hands in the pot each adding a percentage. I like the concept...selling something you don't even possess :)

To the OP, what does your portfolio look like? I would say stay out of this unless you are pretty content with cash on hand, 401K, Roth, home equity, emergency funds, etc. to make the jump into another avenue.
 
It's a dirty business that is highly wrapped up in politics...look at what we did to Putin in order to keep oil trading worldwide in US Dollars.

I personally think fuel is about to do another major spike since that short term drop was really nothing more than a break on what is a restless society and broke economy. Now that competition in the oil market is low, fuel will do what it always does...go up. My opinion, no expert by any means.

I would rather look at other investments in alternative energy that is producing like solar, hydro, and wind. Lots of great industry that is growing and probably a more stable way of making money than traditional hydrocarbon fuels. Sure it could go up, could also drop out. Gotta love gambling :)
 
rockcity said:
And history shows that the trend is for it to continue to decline. I'd hold off for 6 months or so then maybe make a move...
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You think that long? I've read a couple articles from the so called experts, lol, that predict oil will bottom during the second quarter. Perhaps they are thinking the normal rise in demand during the summer season will lift prices? I'm not looking to make a big investment here, probably 2-5% of my total investment account. The tentative plan is to buy during the 2nd quarter if oil does drop more, then sell 1-2 years later. This will be my first investment in oil. I've only ever bought and sold stocks and mutual funds.
 
On average the last 4 oil price declines of greater than 50%:

Average drop was at -64%
We're at about -57% now


One yer after bottom, average gain was 84%.
That means an average price from now would be about $93 and average s&p gain was 19% during that same time.
 
Skinny said:
It's a dirty business that is highly wrapped up in politics...look at what we did to Putin in order to keep oil trading worldwide in US Dollars.

I personally think fuel is about to do another major spike since that short term drop was really nothing more than a break on what is a restless society and broke economy. Now that competition in the oil market is low, fuel will do what it always does...go up. My opinion, no expert by any means.

I would rather look at other investments in alternative energy that is producing like solar, hydro, and wind. Lots of great industry that is growing and probably a more stable way of making money than traditional hydrocarbon fuels. Sure it could go up, could also drop out. Gotta love gambling :)
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So from an investement vehicle stand point, you think oil is shaky but solar and wind are sound?
 
Yes

Probably not as volatile and if you venture out into the world, you will see patches of them all over. Slow and steady wins the race if you don't want to take huge chances. Not to mention you could invest is secondary industries to them like electronics manufacturers, composites, etc. that are related.

Just my two cents...YMMV
 
Skinny said:
Yes

Probably not as volatile and if you venture out into the world, you will see patches of them all over. Slow and steady wins the race if you don't want to take huge chances. Not to mention you could invest is secondary industries to them like electronics manufacturers, composites, etc. that are related.

Just my two cents...YMMV
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noted.

(Never take investment advice from Skinny)
lol

The stock market disagrees with you.
 
Again, OP still really hasn't given a lot of info here.

If you are doing good and spread out well, maybe not a bad investment. Oil has continued to fall and won't argue that it is probably at a good time to buy. If the OP is young, probably a good idea to take a few chances. Again, this is all speculation on my part about his circumstances.

I would ask all the experts that have given advice to someone that has offered pretty much no background info. Maybe one can predict what is going to happen to oil when the Feds bend us over on a new transportation tax to pay for infrastructure. I'd like to sit back and watch my money on that roller coaster ride.
 
I'm here. Just been away :D

Appreciate all the advice and will hold off for now. Heard the same thing on the news today with the oil reserves being about maxed out.

Not sure why you'd need my background info to talk about oil and how to try and make some money off of it. It is kinda like lumber liquidators. They've taken a huge hit. I anticipate that their stock will rebound but don't know if it has hit bottom yet and is a lot riskier than the long term prospects for oil, IMHO. I'm looking at it as more of an education than for retirement or something serious at this point.
 
Background is needed because most would say there is zero reason to invest or trade in something high risk until you have maxed out your other options. Options which are more stable and have tax advantages. Not to mention it is also recommended that you have little to no liabilities as far as debt (cars, cards, etc.) and also have money on hand for a 3-6 month emergency fund. Then it is typically recommended you take chances...less if you are older and have less time to recover if something drops out.

Maybe a professional will chime in because I have no formal training in the matter. I will tell you that I have more in assets than the average man twice my age so I must be doing something right ;)
 
broncosbybart said:
It is kinda like lumber liquidators. They've taken a huge hit. I anticipate that their stock will rebound but don't know if it has hit bottom yet and is a lot riskier than the long term prospects for oil, IMHO. I'm looking at it as more of an education than for retirement or something serious at this point.
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I've been watching LL too. I'm not sure it is done dropping. It feels a bit too risky for me at this time. I bought some CAT though yesterday morning right after the open.
 
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