Buying crude oil options for 2012 and beyond

Discussion in 'Energy Futures' started by kapama, Sep 25, 2008.

  1. kapama

    kapama

    2011 is the latest year for options for USO. What is the easiest and cheapest way to buy crude oil options for year 2012 and beyond?
     
  2. Nymex might offer them, I'm not 100% sure they do options out to '15 and '16. Get a pit broker. Focus on Dec contracts because they have the most open interest and most volume further out.
     
  3. kxvid

    kxvid

    I approve of this thread. I dont approve of buying farout expiration USO calls though. What happens if USO goes the way of SKF, well there goes your moeny. What you should do is buy farout expiration options on futures for crude. Pick you strike of choice and expiration year of choice. Should be more lucrative than buying farout expiration CL futures.
     
  4. So how do you buy options of oil for 2016

    I do not see such an instrument anywhere on the internet, can an individual buy it and if so how?
     
  5. kxvid

    kxvid

    Exactly. There is hardly any info on options on futures on the internet. If you have IB you can trade options on futures, no problem. However, if you are planning on buying and holding for years, and don't want to be charged monthly fees you should go with optionsxpress. Optionsxpress offers options on futures trading capability, their commissions are high compared to IB buy no monthly fees. You must get approved for futures trading at OXPS before you can trade options on futures.
     
  6. Peter Thiel has comments about this from back in 2005 in the book - "inside the house of money"

    In short, there is no liquidity that far out, so he proposed to the reader / people at the Drobny Conference that they buy Canadian oilsand Equities.
     
  7. kxvid

    kxvid

    No liquidity? That sucks people should buy farout expiration crude futures instead then. Opec will cut production so oil will never go under $80 again limiting your downside. Upside is potentially unlimited, most people have no idea how bad things will get in the world oil market in the in the coming years.
     
  8. Even if you are right on the direction, time decay will kill you.

    Better to SELL 2011 options.
     
  9. yes on nymex