Big Dog's Boom Boom Room Message Board

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Gold/Mining/Energy : Big Dog's Boom Boom Room

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To: Big Dog who wrote (37081)	12/4/2004 3:21:00 PM
From: Archie Meeties	of 206168

Big, Fascinating idea. But perhaps instead of creating your own hedging tool, you could work with somebody and make a synthetic one utilizing options of different groups of oil service stocks plus some input from the energy futures? That would insure some liquidity. The assumption here is that certain OS stocks show some correlation to day rates. The work part of this would be finding the companies or group of companies that show good correlation with day rates and then modeling this correlation My guess is it would be non-linear, given how day rates inflect when % available rigs drops below a certain number. Josh.

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