any amateur Oil/Gas investors out there?

[black_sab]

whatevs

 

[BrotherBart]

Bet on oil going up in the next two years and you are going to take a serious ass kicking. Even without the churn change expense from trading. You are swimming in a shark tank.

Now, go find you a stock trading forum. This ain't the place for it.

 

[hossthehermit]

figured I'd post my silly idea here since there are a lot of oil burners in these parts . feel free to poke holes in my reasoning.

Been spending my time reading the pellet stove and boilers forums, but popped over here for a bit.

I'm an amateur(at best) investor that generally is pretty conservative in my 401k, but I take chances in a side trading account. Some winners... some epic losers.

I got lucky and dumped a chunk of money into the ETF UWTI when it hit its low around 2 months ago.
I was watching the stock chart (went from ~$41 to ~$3 in a bit less than a year) and listening to the oil folks say that we were heading to $20 a barrel and figured... "bahhhh... time to get in."

UTWI is uber dangerous because it's sort of a 3x multiplier of OIL (the etf ticker). Example... OIL went up 3.x% today and UWTI went up 9.x% today. Likewise, UWTI took a massive hit and dropped almost 10% yesterday. Not for the faint of heart. There is also something like a 1.3% expense with UWTI ...that's kind of meh.

Anyhow, my cost basis is $2.30. I then sort of sat back and watched in astonishment as it gained... and gained. I'm up close to 50% overall since I started on March 16th. Obviously.. I got lucky on the timing.

It got me thinking though... I'm looking at moving and every house I look at has oil ... southern NH mostly, and it gets cold.

Maybe by tossing cash at either OIL or UWTI I can hedge against the eventual oil rise and defray my heating costs.

Case 1: If oil goes up in price then I get porked on heating.... but I win on the ETF.
Case 2: If oil plummets, I get cheap heating, but I'm locked into a loss longer, and possibly can grab more cheap OIL or UWTI for the next price rebound. This hinges on there being rebounds/fluctuations.

How long can crude stay at $50 to $60? Good arguments on both sides. I think we'll be at $70-80 before you know it, and $100 isn't that far away...

Does UWTI go from $3 to $40+ if we get back to $115 per barrel crude? In that case even a $1000 investment today gets you ~$12,000. That's heating costs for a few years for most people.

I thought of the doing the same thing for nat gas, since that's what I currently use... but Nat Grid seems to pork you no matter what and they nail you with a litany of other charges. With heating oil at least the price definitely drops if crude drops.

UGAZ is the 3x ETF for nat gas... up from a low of $1.75 to $2.83 today. As high as $28 in the last year.

I saw a turtle yesterday ................. I like turtles