[misterno]

I looked at USO

USO exactly trails WTI. So looked at USO put options because call options were expensive.

I want to sell Put options for USO but then what if the WTI keeps dropping and buyer wants to sell back the option to me before the expiration? Then I will be toast.

So is there a European style option for USO or Brent?

Any suggestions on where to invest?

[ROCKMAN]

mis - I suspect a better investment might be in a tapioca mine. BTW anyone that takes oil/NG investment advice from a geologist should seek immediately psychiatric help.

[Outcast_Searcher]

I looked at USO

USO exactly trails WTI. So looked at USO put options because call options were expensive.

I want to sell Put options for USO but then what if the WTI keeps dropping and buyer wants to sell back the option to me before the expiration? Then I will be toast.

So is there a European style option for USO or Brent?

Any suggestions on where to invest?

Um, with respect, anyone who would sell enough naked short options to be "toast" if the price moves against them is somewhere between "misguided" and an idiot.

Geez. Give me a break. If you're worried about the risk then sell a spread, or take a longer term view and invest in quality oil shares (at some price -- you can sell put options on such shares too) and if you inherit shares at lower prices -- get paid nice dividends to wait, as well as potentially large capital gains when oil prices (eventually) rebound. And you can ramp up your position size gradually. (This is what I do during "scary" deep bear markets on oil prices).

There are many approaches to investing.

[americandream]

mis - I suspect a better investment might be in a tapioca mine. BTW anyone that takes oil/NG investment advice from a geologist should seek immediately psychiatric help.

[misterno]

I was thinking about investing in a oil based financial instrument where I want to cash in- in 4-5 years time. I know that an individual can not invest in financial commodity markets so all I can do is USO? But USO is an ETF and it keeps rolling to the next month which means it is not 100% correlated to Brent or WTI and depending on contango or backwardation the price can go anywhere.

I need some kind of oil option a European one where I can sell put options but the buyer can not sell it back to me until say 2018 or some future date.

Am I asking too much?

[misterno]

I looked at USO

USO exactly trails WTI. So looked at USO put options because call options were expensive.

I want to sell Put options for USO but then what if the WTI keeps dropping and buyer wants to sell back the option to me before the expiration? Then I will be toast.

So is there a European style option for USO or Brent?

Any suggestions on where to invest?

Um, with respect, anyone who would sell enough naked short options to be "toast" if the price moves against them is somewhere between "misguided" and an idiot.

Geez. Give me a break. If you're worried about the risk then sell a spread, or take a longer term view and invest in quality oil shares (at some price -- you can sell put options on such shares too) and if you inherit shares at lower prices -- get paid nice dividends to wait, as well as potentially large capital gains when oil prices (eventually) rebound. And you can ramp up your position size gradually. (This is what I do during "scary" deep bear markets on oil prices).

There are many approaches to investing.

Call options at this time are very expensive because everybody is expecting oil prices to go up in the long term

I can sell put options and I know that I will be making money in 2-3-4 years time if I wait. But what if the buyer of the option wants to put it back to me before that then I will be toast.

Someone help me find a financial instrument. Brent will not stay this low forever.

[americandream]

Cant help you mate. I day trade prices so its all fairly basic stuff I do....in by London latest and out by NY closing, no later. Have you tried one of the trading forums.

[Outcast_Searcher]

Call options at this time are very expensive because everybody is expecting oil prices to go up in the long term

I can sell put options and I know that I will be making money in 2-3-4 years time if I wait. But what if the buyer of the option wants to put it back to me before that then I will be toast.

Someone help me find a financial instrument. Brent will not stay this low forever.

OK. Let's try again, more slowly.

1). If you are going to trade options:

a). You need to know what you are doing.
b). If you trade big enough to potentially be "toast" -- DO NOT DO THAT. Options have leverage, and leverage is where the uninformed or greedy can BANKRUPT themselves.

2). If calls are expensive, then puts are expensive. There is a basic option principle that many combinations of options and the underlying can be synthetically used to replace each other. Thus there is a concept called put-call parity. So if calls are expensive, so are puts. Seriously -- if you're going to trade such things you need to get a book or three and learn such concepts.
https://en.wikipedia.org/wiki/Put%E2%80%93call_parity

3). You ABSOLUTELY DO NOT KNOW that if you sell put options on crude oil or their derivatives that you "will be making money" in 2 to 4 years. I happen to think that's a reasonable bet, but speculating that it is absolutely certain by selling put options is a good way to destroy your portfolio. Can you handle massive losses in 2 to 4 years if it takes, say, 10 years for oil to move way back up? What happens if there is severe oil contango or backwardation when you want to roll your contracts forward if you need to wait? (There are reasons only about 10% of nonprofessionals make money trading commodities).

4). Unless you are trading big enough to be dangerous, it makes NO practical difference whether you are trading American or European style options, if you know what you are doing and don't overtrade. Example: Sell a $50 put for 2 years out. Oil declines to $25. Now, you're underwater $25 per barrel, less your original premium. This is true whether the oil futures get put to you early and you turn around and sell them, or you buy the put options back for rougly $25 per barrel (so deep in the money they will likely have very little premium) and take a big loss.

(Obviously you don't want to let the oil futures themselves expire, and inherit trainloads of oil. But as long as the futures have time left in them, you can trade them.)

[americandream]

OS

Whats the success rate for forex...with non professionals I mean?

[Outcast_Searcher]

Someone help me find a financial instrument. Brent will not stay this low forever.

I'm happy to try and did above. I'm just suggesting using stocks instead of futures or ETF's, as stocks are a lot safer (no contango or backwardation and far smaller units to trade) and you get paid to wait via the dividends.

This Barrons article explains why the crude oil ETF's (like USO) are a (seriously) inferior vehicle for longer term traders to use to hold oil.

http://online.barrons.com/articles/the- ... 1427500695

They suggest a couple good oil stock funds near the end of the article. They move more gently than oil futures, but they do tend to grow over time, so you have a better shot at profits over the longer term.

Another way to go is midstream MLP's. They have little direct exposure to the underlying energy commodity they transport. However, skittish traders tend to sell them down meaningfully when energy gets cheap. AMLP, a midstream energy ETF (mainly pipelines) with 23 companies currently sells at a price nearly 25% below the highs late last year, and sporting a dividend of roughly 8%.

Now, this ETF won't sprint wildly higher if oil prices surge. OTOH, I really like an 8%ish dividend while I wait for prices to increase by about a third, to go back to normal for this ETF. Oh, and over time, the dividends (and the fund) both tend to grow by about 5% a year. And with an ETF you don't have the 100% unsecured risk you have with an ETN like AMJ. If banks get in big trouble again, your word of "toast" could apply to some of the ETN's which they don't properly hedge (and aren't required to hedge AT ALL via the current, very stupid regulations).

Good luck regardless of what you decide to do, but seriously, if you do decide to go with futures, invest some time and effort into ensuring you understand the real risks and the alternatives. There are lots of good investment books out there now on places like Amazon, with lots of thoughtful reader reviews. I've been investing for 35ish years now. Knowledge and prudence make a big difference over time.

[Outcast_Searcher]

OS

Whats the success rate for forex...with non professionals I mean?

Sorry, I don't have a clue. (I'll always answer honestly, and "I don't know" will thus be my answer in many cases).

I can try to mention a few likely related principles:

It's hard enough (for me) to somewhat intelligently trade basic stocks, funds, and options without dabbling in all the complexities of Forex. I invest (dollar hedge) a bit in foreign currencies via a good international bond fund (for the long term), but generally don't like bond yields in recent years.

The main thing I'd watch out for is large contract sizes. If the sizes are big compared to what you are comfortable investing, then it's not easy to be patient and scale into and out of things. Thus a big move can really hurt you and make it hard to stick to your longer term plan.

I see they have mini and micro lots now. Depending on how high the trading expenses are (as a percentage of the contract), this might be helpful. (This is ABSOLUTELY IN NO WAY any kind of an endorsement, nor do I know if the information provided on this forex link is accurate. This is ONLY an FYI based on a quick Google search I did on "forex contract size").

http://www.dailyfx.com/forex/education/ ... Sizes.html

[americandream]

[quote="Outcast_Searcher"][quote="americandream"]OS

Whats the success rate for forex...with non professionals I mean?[/quote]
Sorry, I don't have a clue. (I'll always answer honestly, and "I don't know" will thus be my answer in many cases).

I can try to mention a few likely related principles:

It's hard enough (for me) to somewhat intelligently trade basic stocks, funds, and options without dabbling in all the complexities of Forex. I invest (dollar hedge) a bit in foreign currencies via a good international bond fund (for the long term), but generally don't like bond yields in recent years.

The main thing I'd watch out for is large contract sizes. If the sizes are big compared to what you are comfortable investing, then it's not easy to be patient and scale into and out of things. Thus a big move can really hurt you and make it hard to stick to your longer term plan.

I see they have mini and micro lots now. Depending on how high the trading expenses are (as a percentage of the contract), this might be helpful. (This is ABSOLUTELY IN NO WAY any kind of an endorsement, nor do I know if the information provided on this forex link is accurate. This is ONLY an FYI based on a quick Google search I did on "forex contract size").

http://www.dailyfx.com/forex/education/ ... Sizes.html[/quote]

Thanks for that. Youre a fount of information I have to say. I trade prices and its as simple as you can make it...not even necessary to know the news times and is deadly accurate. The other asset classes all follow the same price structure. Having said that, you can never know enough in this game so thanks for the heads up on options. Ill have to look into that at some time just to spread my asset classes a bit. Oh, I have oil and NG on my platform...I prefer the GBPNZ though. Does big daily moves.

[phaster]

mis - I suspect a better investment might be in a tapioca mine. BTW anyone that takes oil/NG investment advice from a geologist should seek immediately psychiatric help.

personally I'd advise others to have a short position on the tapioca mine "fad" because of reported cancer risks!

http://www.berkeleywellness.com/healthy ... l-problems

legal disclaimer: I know nothing

http://www.youtube.com/watch?v=UmzsWxPLIOo