Strictly: Drilling and oil-field services Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Strictly: Drilling and oil-field services

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Lucretius who wrote (14354)	3/13/1998 11:40:00 AM
From: 007	Read Replies (1) of 95453

Crude Oil Strips - Update Further to the piece you posted concerning options for crude futures, I looked into it and priced them out. The latest expiration date I found was 12/00. They cost $1,000 for a strike price of $19/barrel and they control 1,000 barrels. Therefore, breakeven is at $20. Crude options this far out are extremely illiquid. It's true that if oil were to spike to $40, you could make $20k for each $1k invested. However, IMO these options are not worth the risk because the expiration date is too soon. We can be very certain that oil will spike again, and at a minimum go above $20, but betting on it occurring within the next 33 months seems unnecessarily risky to me. I agree with your assessment that the best place to be to capitalize on such eventualities is to be invested in this sector. After 33 months in this sector, we should see substantial appreciation in these stocks without nearly the level of risk inherent in these crude strips. If oil does rise over $20 in that time period, then we will do extremely well with our equities. 007 PS NE is attracting a lot of attention today. Earlier I noticed 100k on an uptick.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next