Short oil but long energy
It must seem strange that we own DUG (an oil short position) while having even more money in MUR as well as energy stock calls (a long position).
I bought DUG because I felt that oil would move back closer to $120. Partly because I saw movements to reduce speculation and partly because the dollar seemed to be firming up.
At the same time, I believe that the energy companies I selected are awash with money. It doesn't matter if coal, oil, or natural gas are at today's price or 20% lower. These companies will beat expectations (I hope). Also, there should be more consolidation, especially among coal producers.
Well, looks like I am right
1. Oil has dropped from $147 to $136. DUG is up 20% from our purchase point
2. Consolidation has begun. CLF announced that they are purchasing ANR. I own ANR stock and CLF calls, so the ANR buy was a nice thing. Given the choice, I wouldn't mind having ANR calls right now......
http://money.cnn.com/news/newsfeeds/articles/apwire/673cf3525363d7f98e831dd47240861c.htm
This is dilutive - CLF has to issue more shares. I think that this will hurt the stock
I bought DUG because I felt that oil would move back closer to $120. Partly because I saw movements to reduce speculation and partly because the dollar seemed to be firming up.
At the same time, I believe that the energy companies I selected are awash with money. It doesn't matter if coal, oil, or natural gas are at today's price or 20% lower. These companies will beat expectations (I hope). Also, there should be more consolidation, especially among coal producers.
Well, looks like I am right
1. Oil has dropped from $147 to $136. DUG is up 20% from our purchase point
2. Consolidation has begun. CLF announced that they are purchasing ANR. I own ANR stock and CLF calls, so the ANR buy was a nice thing. Given the choice, I wouldn't mind having ANR calls right now......
http://money.cnn.com/news/newsfeeds/articles/apwire/673cf3525363d7f98e831dd47240861c.htm
This is dilutive - CLF has to issue more shares. I think that this will hurt the stock
posted by Andrew at
5:11 AM
1 Comments:
DUG DOES NOT CRUDE PRICES AT ALL!!!!!
DUG is an inverse of the Dow Jones Oil and Nat Gas index which has all the f&&king evil oil companies.
DCR was one which was tracking crude, if you want to play crude, the simplest way is to buy USO puts. And the way this POS trades, the near month options have huge premiums, so my advice is to buy long dated puts.
-EY
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