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A few ways you can profit from the current surge in oil prices

By A Smart Trader

Here are some ways small investors can profit from the volatility in crude oil prices without having to store a few barrels of oil in the backyard (Not an exclusive list) :

If you think oil prices are going up (Which I do) :

1) Buy stocks of companies that engage in oil exploration and drilling such as Exxon Mobil (e.g. XOM, BP, SNP, PBR, STO)

2) Buy Exchange Traded Funds that are directly proportional to oil prices (e.g. USO, OIL, DBO, UCR)

3) Short sell (Borrow to sell) the stocks of those in the airline, transport or courier industry (e.g. UPS, FDX, UAUA)

If you think oil prices are going down :

1) Invest in alternative energy, such as the Guinness Atkinson Alternative Energy Fund or First Solar (FSLR)

2) Buy the UltraShort Oil & Gas ProShares

If you think oil prices are either going up or down by a huge magnitude:

Buy a straddle (A put and a call option at the same price) for a oil ETF

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This entry was posted on May 25, 2008 at 2:36 am and is filed under Commodities, ETFs, Oil, Options. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

3 Responses to “A few ways you can profit from the current surge in oil prices”

  1. Commodities » A few ways you can profit from the current surge in oil prices Says:
    May 25, 2008 at 3:33 am

    [...] Sunshine Kills Vampires wrote an interesting post today onHere’s a quick excerptHere are some ways small investors can profit from the volatility in crude oil prices without having to store a few barrels of oil in the backyard (Not an exclusive list) : If you think oil prices are going up (Which I do) : 1) Buy stocks of companies that engage in oil exploration and drilling such as Exxon Mobil (e.g. XOM, BP, SNP, PBR, STO) 2) Buy Exchange Traded Funds that are directly proportional to oil prices (e.g. USO, OIL, DBO, UCR) 3) Short sell (Borrow to sell) the stocks of those in the airline, transport or courier industry (e.g. UPS, FDX, UAUA) If you think oil prices are going down : 1) Invest in alternative energy, such as the Guinness Atkinson Alternative Energy Fund 2) Buy the UltraShort Oil & Gas ProShares If you think oil prices are either going up or down by a huge magnitude: Buy a straddle (A put and a call option […] [...]

  2. Invest Tool Says:
    May 25, 2008 at 5:24 pm

    I think the oil price would go down, but don’t know when.

  3. A Smart Trader Says:
    May 26, 2008 at 5:01 am

    It will probably go down in a few months time, and then it will come back up

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