Oil companies, refiners, and drillers don't necessarily track the price of oil. USO is an oil ETF that does a better job (it's at $28.60卤 right now). July 30 calls (UBOGD) are 3.30 bid 3.40 ask. If you think USO will go to $35 by July 17 (expiration date), which is comparable to ~$55 oil, then you could make $480 on 3 call options (cost $1020), or $640 on 100 shares of USO (cost $2860).I want to invest in oil today whats the best way should i buy options?
An option till july can be quite pricey given the long time horizon. Volatilty is at an all time high and you would have to pay a heavy time premium.
I would buy several shorter term calls (april/may expirations) for several stocks to spread out the risk.
Are you sure investing in oil this time will be wise now that the price of oil is going down every day?
No comments:
Post a Comment