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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Umunhum who wrote (11633)	4/10/2004 4:16:37 AM
From: Haim R. Branisteanu	Read Replies (2) \| Respond to of 110194

is the writer long oil futures?

To: Umunhum who wrote (11633)	4/10/2004 8:35:46 AM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 110194

i agree with the idea of buying oil futures, although i also own oil stocks. also, my philosophy toward the futures is to ignore the margin requirement and have 100% "cash-backed" position. i think margin is a quick road to money heaven, especially in futures. i think the need for sufficient financial backing is especially important in buying an illiquid position like the far-out futures which may not even have a bid or ask on them. i also like the idea of spreading the positions out over multiple years, but this is easier said than done at efficient prices. the far-out contracts are very illiquid. you'll notice on that quote sheet you posted that the 2010 price was higher than 2009, which is the only break in the backwardization string of the whole series. my guess is this was somebody "stretching" to get a fill in 2010, where i have tried unsuccessfully to get filled several times (i was luckier on 2009). so my approach is to be patient and have an "accumulate" attitude.

To: Umunhum who wrote (11633)	4/10/2004 8:44:33 PM
From: ForYourEyesOnly	Read Replies (1) \| Respond to of 110194

Hello uhmuhnum, "With Hubbert's Peak just around the corner, a dollar crisis on the horizon, and very limited excess capacity I believe oil should be priced with forwardization not backwardization." Think carefully about what backwardation and contango mean in terms of inventory levels, supply, demand, and traders' desire to take delivery vs. their desire to make delivery. You will find the answer there if you look carefully (hint: backwardation is a sign of low inventory levels). "I am trying to formulate an investment strategy to buy 50 contracts of oil. I believe that there is only $3 to $4 dollars on the down side and $20 to $40 on the upside." Have enough margin on hand to handle a drop of the maximum conceivable magnitude. WTI @ $20 or less, just in case.......if you are not ready for what Mr. Market can hand out, he will take all of your money and distribute it to others. Good luck,