Capturing value in oil rise

[wd9]

What is the best way to capitalize on the rising value of a barrel of oil?

[TOM4CWB]

Wd9,

If you have stomach and cash,

buy an at the money put;

Sell out of the money calls to pay for the put.

If the price of oil rises more... double up and down;

buy another put;

Sell 2 more callsout of the money calls; to finance that put.

And keep it up till the market peaks.

[cottonpicken]

Buy cpg and put it into your tfsa.

Tom,80% of options expire worthless.

[riders2010]

Maybe I should buy a horse or invest in a running shoe manufacturer because alot more people will be walking! lol!

[FarmRanger]

<i>"Tom,80% of options expire worthless."</i>

If he's selling calls, that must be what he's
counting on.

Tom, how do you make money buying puts and
selling calls in a rising market? Sounds like a
recipe for losing pots of money to me?

[TOM4CWB]

cotton,

THAT IS WHY financing is done by SELLING CALL OPTIONS

IF truly there is an 80 percent chance the price will not change significantly...

Sell Canola, Wheat,or corn; for fall of 2011. All are UP BECAUSE of Black Oil.

[TOM4CWB]

FarmRanger,

In the spring of 1996 I bought puts and sold calls.

I paid for the puts and margin calls by selling call options.

I have not done it since... lost my nerve.

Which is why I said... IF you have money to make margin calls.

I do not think we are at the market top... do not believe wd9 thinks so either.

When this gets toppy... THEN start selling calls and buy puts.

Alternatively;

buy SPE this spring from crop insurance and lock in high prices that are being caused by Black Oil prices being HIGH. Then the Alberta Gov pays the margin calls!

[wd9]

Pardon my ignorance cotton, CPG? As in Crescent Point Energy?

[wd9]

What about ETF's based in energy?

[cottonpicken]

Sorry,yes crescent point.I probably shouldn't have
spit that out either,great company whose share
price will rise with oil but i haven't looked at their
hedge program.

Etfs are a great way to do it if you have a stock
trading account but not a brokerage(futures)trading
account.

I lost my etf list links but im pretty sure there is a
1x,2x,3x leveraged funds.Which means for every
dollar oil goes up the fund goes up 3x or down 3x
if oil goes down.

Tom,i don't think i can agree that crude is making
this stuff go up,they are all going up for the same
reasons,imo.

[cottonpicken]

http://etf.stock-encyclopedia.com/

Found it,my bookmarks list went into hiding on this
damn mac.

[TOM4CWB]

CP,

"Tom,i don't think i can agree that crude is making
this stuff go up,they are all going up for the same
reasons,imo."

My point as well.

Crude is an indicator of the global economy. If demand goes up... so does demand for food and commodities.

The ethanol/bio diesel effect in the US/EU compounds this with gasoline and diesel prices driving corn and beans up as a demand factor for grains.