Oil: For the Gamblers Out There
January 12th, 2007WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
Back in July 2006, I wrote: “Oil? It could just as easily go to $45 before it goes to $200. I wouldn’t go near oil, long or short. It’s far too volatile.”
Oil was trading around record highs back then. Oh, what a difference a few months makes…
Oil is now trading around $52.
With oil prices gapping down, and analysts predicting more of the same…
Consider out of the money call options on March NYMEX Light Sweet Crude Oil.
I don’t know if I’ve ever seen a more attractive collapsitalism opportunity. The weirdest moves in the markets tend to come when most people don’t expect them. (Of course, only insiders, crackpots and lunatics try to catch these moves.) So, as the financial press is focusing on mild weather and large inventories, blah, blah, blah, the U.S. just attacked Iran, a country that is probably in a position to shut down the transportation of oil from the Persian Gulf for an unknown period of time.
I haven’t even bothered to see how far out of the money these calls are going, but I’d get the cheapest ones available. This would be an all or nothing gamble. Maximum risk / Maximum reward. Consider your money gone, on a trade like this.
Of course, if you make money on this, you’ll make a pile. Spend it fast because the system as we know it might not be around for much longer after you take your winnings off the table!
Happy trading!
Just made $500+- today on the 62 pounds (1000 oz) of silver bars (+0.42/oz) I bought last week. What a crazy world.
http://www.goldcentral.com/gspp-charts-and-news/ag.html
Here is a counter-point to oil price increases:
http://www.lifeaftertheoilcrash.net/Archives2007/BakhtiarStrangulation.html
It is hoped that this combined with international isolation and (with the help of Saudi Arabia) a reduction in oil prices (OPEC crude basket price: $51.25 per barrel on 8/1/07) will not only cripple the Iranian economy, but also (possibly) lead to a regime change.
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