OK I'm done messing with oil futures.

[MarathonMike]

I bought some shares of a leveraged oil ETF a couple of weeks ago when crude oil broke below $26 per barrel. It quickly went much lower as we all know. Crap! But I stayed with it thinking it would rebound. This morning I would have been in the money, except the ETF shut down and and sold when oil was around $21. Crap! I didn't even know that was a possibility. Oh well lesson learned.

 

[White 6]

Wow. Being an amateur day trader for fun and profit pretty risky hobby, especially right now. Surprised you are just starting to get it. Be a conservative and conserve what you have.

 

[Deplorable Yankee]

I bought some shares of a leveraged oil ETF a couple of weeks ago when crude oil broke below $26 per barrel. It quickly went much lower as we all know. Crap! But I stayed with it thinking it would rebound. This morning I would have been in the money, except the ETF shut down and and sold when oil was around $21. Crap! I didn't even know that was a possibility. Oh well lesson learned.

Oil can easily go to 10 11 bucks a barrel

It happened under bush sr....if I remember correctly

 

[Deplorable Yankee]

Calling the bottom is always risky

Roll dem bones

 

[Dick Foster]

The street and day trading is no place for amateurs. The street sharks will eat you alive like you're their favorite food. Believe me if you think you can outwit them you're simply not up to the task. The only way to win is to play long and use time as your ally. They can't in their game so they can't beat you but you will win every time as long as you don't panic and wait them out. Their weapons are fear and greed, yours should be time and patience.

 

[MarathonMike]

Wow. Being an amateur day trader for fun and profit pretty risky hobby, especially right now. Surprised you are just starting to get it. Be a conservative and conserve what you have.

I am a conservative and have done very well conserving what I have. But the stock market is interesting to me so I "experiment" with different investments. Just sharing some info on what can happen with a leveraged oil ETF.

 

[Cellblock2429]

I bought some shares of a leveraged oil ETF a couple of weeks ago when crude oil broke below $26 per barrel. It quickly went much lower as we all know. Crap! But I stayed with it thinking it would rebound. This morning I would have been in the money, except the ETF shut down and and sold when oil was around $21. Crap! I didn't even know that was a possibility. Oh well lesson learned.

/----/ I've been burned on oil too many times. I leave it to the pros.

 

[MarathonMike]

I bought some shares of a leveraged oil ETF a couple of weeks ago when crude oil broke below $26 per barrel. It quickly went much lower as we all know. Crap! But I stayed with it thinking it would rebound. This morning I would have been in the money, except the ETF shut down and and sold when oil was around $21. Crap! I didn't even know that was a possibility. Oh well lesson learned.

/----/ I've been burned on oil too many times. I leave it to the pros.

What sux is oil did just what I thought it would do and they closed the friggin ETF before the rebound! I agree, like I said in the title, that was my last venture into oil trades.

 

[Toro]

I bought some shares of a leveraged oil ETF a couple of weeks ago when crude oil broke below $26 per barrel. It quickly went much lower as we all know. Crap! But I stayed with it thinking it would rebound. This morning I would have been in the money, except the ETF shut down and and sold when oil was around $21. Crap! I didn't even know that was a possibility. Oh well lesson learned.

Don't do that again. Leveraged commodity ETFs are awful. They shouldn't exist.

First, the daily volatility of the leveraged ETF will eat you alive. They mark-to-market daily. If they go up and down every day, but they are the same price at the end of the month as they were at the beginning of the month, they'd still lose money. I don't want to go through the math, so trust me.

Second, the oil ETFs are horrendous unto themselves. If the price of oil did not move, you'd still lose money in these things. Why? Because the USO buys the front month futures, and rolls the contract every expiry month. Oil futures are usually in contango, as they are today. Contango means that the further the futures prices go out in time, the prices are higher. For example, the May contract is $28. The June contract is $31. The USO buys the June contract at $31. If prices don't change, it then sells that contract at expiry at $28. So the USO loses $3 even if the curve doesn't move.

If you want a leverage way to speculate in oil, buy XLE or OIH or HAL or SLB. I own OIH.

 

[MarathonMike]

I bought some shares of a leveraged oil ETF a couple of weeks ago when crude oil broke below $26 per barrel. It quickly went much lower as we all know. Crap! But I stayed with it thinking it would rebound. This morning I would have been in the money, except the ETF shut down and and sold when oil was around $21. Crap! I didn't even know that was a possibility. Oh well lesson learned.

Don't do that again. Leveraged commodity ETFs are awful. They shouldn't exist.

First, the daily volatility of the leveraged ETF will eat you alive. They mark-to-market daily. If they go up and down every day, but they are the same price at the end of the month as they were at the beginning of the month, they'd still lose money. I don't want to go through the math, so trust me.

Second, the oil ETFs are horrendous unto themselves. If the price of oil did not move, you'd still lose money in these things. Why? Because the USO buys the front month futures, and rolls the contract every expiry month. Oil futures are usually in contango, as they are today. Contango means that the further the futures prices go out in time, the prices are higher. For example, the May contract is $28. The June contract is $31. The USO buys the June contract at $31. If prices don't change, it then sells that contract at expiry at $28. So the USO loses $3 even if the curve doesn't move.

If you want a leverage way to speculate in oil, buy XLE or OIH or HAL or SLB. I own OIH.

Good info!