can you explain this to the noobs
WTI just spiked down to $48.85.
What’s the lowest it hit a few months back, $43? Cmon, new low please!
Igor, go fuck yourself - you know nothing about me or my returns - for all I know you’re the fucking noob you troll piece of shit.
and bromion, my returns are, overall, averaging out to ~30% with long only positions in the past 2 years, so fuck off from your high horse with your condescending “don’t lose your money” piece of shit idiocy. “oh, I shouldn’t lose money? what awesome advice, thanks, I’ll just get some t-bills then”. every trade you ever made was in the green? no? then stfu
also,wtf does penny stock fraud have to do with anything? and stop saying “under any scenario”, cuz obviously there are scenarios where your advice is fucking stupid. If oil goes up, you want to be long uwti (levered long oil). if oil goes down, you want to be long dwti (levered inverse oil). your advice to stay away only makes sense under the scenario of uncertainty about future oil prices, and low tolerance for risk. and for the record, I didn’t ask shit about about whether or not levered funds were a good idea, I asked if people have a view on oil prices in the next 6 months, preferably with some good reasoning. all you’ve done is told me a bunch of condescending shit about levered funds and talked down to me. That “we the industry” line is really telling about your opinion of yourself - like you think you’re such a big deal that you can speak on behalf of the entire oil and gas industry as a figurehead or some shit.
i was actually being serious
Anyway, I decided my short term view of ~$40 is coming within 6 months. I sold all my royal dutch shell shares (my only oil stock), got out of uwti at a loss of about $200, and put the funds into dwti (inverse oil).
How do you predict short term movements in oil? It is way outside of my circle of competence, but seems like it would be very difficult to do.
For me, the short view is similar to the stuff Ohai wrote, as well was as the trade sanctions on Iran being lifted by the US. Adding Iranian supply to the market would push prices lower, all else equal. That said, the “all else equal” part is not at all a certainty. Obviously I don’t have certainty about an outcome for the 6 month timeframe. The reasons for a drop in the oil price seem to stack more heavily than the the reasons for a rise in it. on the pro-drop in price side: - Iranian supply incoming to the market shortly - US domestic production has increased due to fracking and other technologies to the point where there is now a large domestic glut. US production remains high relative to 2,3,4 years ago, though obsviously production could get scaled back - Chinese economic growth is the weakest it’s been in about 6 years, and their oil demand should be lower in the near term as a result of that - Saudi Arabia has stated explicitly and several times that it will not reduce its production, regardless of what happens with the price per barrel I imagine that the eruption of a conflict in the middle east would have to make the price shoot up, and obviously the region is not known for its stability. Still, I’m hoping they can hold out without a major all out war for the next 6 months.
Yes, but your point about the Iranian supply is public knowledge and, therefore, already priced into the futures. The only way I could see you justifiably predict short-term movements with really any asset is private knowledge or have a unique perspective/opinion about a piece of public knowledge.
[/quote]
Yes, but your point about the Iranian supply is public knowledge and, therefore, already priced into the futures. The only way I could see you justifiably predict short-term movements with really any asset is private knowledge or have a unique perspective/opinion about a piece of public knowledge.
[/quote]
Be that as it may, I’m up 10% on the trade so far
Don’t be fooled by randomness…
levered ETNs are often called noob grinders, even in Canada. the 3 RAs probably didn’t know what they are because they’re RAs, not PMs. just guessing, but i’d say 90% of the time, you will get killed holding a 3x levered strategy on something that has a long-term historical real return of 0% over a few years, and possibly several months. a much better bet would be buying put options on oil stocks imo. leverage on leverage and you lose a lot less than you need to get the same exposure with a 3x ETN.
^ 90% of the time? based on what? your hunch? All I can say is the markets got slaughtered today and I’m still up.
Agreed. Just hold your nose and shares of producers, grab with both hands.
WTI @ $46. Ain’t interested yet, but getting interesting. Can I see $39 please?
Based on the market dynamics, as we described earlier, that causes levered ETFs to lose money if the market does not trend. It is good that you are up so far, if randomly or intentionally. Pray tell what is the ETF you bought on 7/20… so that we might learn? Since you mentioned that you bought a 3x levered ETN for $1.94, I am guessing that it is UWTI. But since you described that the trade has been profitable and UWTI closed on 7/31 at $1.50, I must be mistaken.
^ initially it was uwti. within a couple days, I had eaten a $200 loss. If you read further in the thread, I changed my mind about what I thought oil would do. At that time, I switched into DWTI, which is a levered short position - basically the opposite of UWTI. I got into that position at $115. It’s trading at about $140 right now. I’m up about $1400 overall, after subtracting my initial $200 loss.
I also put a lot more money into dwti than I had into uwti, because I sold off my oil stocks and added those funds to the short position.
Very ugly day… bought a fair amount of majors when wti was around 50-55, been taking a beating. Holding off for now…