Best representation of CL in stocks ?

Discussion in 'Stocks' started by anglagard, Oct 2, 2011.

  1. I'm interested in investing in CL for the longer term (Light Sweet Crude Oil) but CL contract leverage is much more than what I'm willing to invest.

    Which is the best CL representation in Equities so I can use proper sizing ?

    Thank you kindly.
     
  2. Take a look at OIH. Sort of a combination of Oil and S&P 500.
     
  3. USO, the closest thing your gonna get to oil contracts. Its basically an etf that buys oil futures. if you wanna trade oil but not buy the futures, you buy USO.

    check out its composition:

    http://finance.yahoo.com/q/hl?s=uso
     
  4. gobar

    gobar

    also watch for contango effect for uso
     
  5. Yes, USO is better if you only want oil. I misread your question and thought you wanted a mix of equities and oil. Sorry.
     
  6. I would compare any commodity ETF with the underlying before I assumed it correlated. I don't know how well USO is correlating now, but there were big problems in the past related to unusual contango in the crude market.

    Basically, USO buys crude futures and rolls them over. If the far-dated months are trading well in excess of cost of carry, anyone pursuing a buy and roll strategy will take a haircut everytime they roll.

    An alternative would be to buy an oily pure-play E&P company, but any stock is going to be affected by the overall market as well as crude prices.
     
  7. nitrene

    nitrene

  8. Maybe a call option on CL.
     
  9. Bob111

    Bob111

    imo stocks related to this sector with decent dividends is much better option than ETF. like MLP's or something
     
    #10     Oct 5, 2011