What do you guys think about this new ETF (AMEX:UGA) to personally hedge against gas prices? I really don’t know much about it.
I’ve been trying to explain to everyday Joe Sixpacks for years in the trucking industry how wise they would be to do this. Obviously Diesel isn’t quite the same as gasoline, but the correlation is decent.
Dont forget that this ETF invests in gasoline futures, and depending on the degree of contango, there could be large losses around roll time. Of course this may be mitigated by the return on the cash in treasuries.
I invented a credit card/derivatives combination hybrid product called “SmurFixGas” that allows consumers to buy 500 gallons of gasoline at a fixed price so long as they do it within 1 year. It didn’t take off thus I enrolled in the CFA program. Now I’m sitting here posting on this chatroom like a dweeb.
Rydex Wrote: ------------------------------------------------------- > Dont forget that this ETF invests in gasoline > futures, and depending on the degree of contango, > there could be large losses around roll time. Of > course this may be mitigated by the return on the > cash in treasuries. I don’t know enough about how futures ETFs work, can you explain further? Thanks.
whodey Wrote: ------------------------------------------------------- > Rydex Wrote: > -------------------------------------------------- > ----- > > Dont forget that this ETF invests in gasoline > > futures, and depending on the degree of > contango, > > there could be large losses around roll time. > Of > > course this may be mitigated by the return on > the > > cash in treasuries. > > I don’t know enough about how futures ETFs work, > can you explain further? Thanks. someone has been slipping on his CFA studying
buddha Wrote: ------------------------------------------------------- > someone has been slipping on his CFA studying no not at all, I haven’t gotten to the material discussing US gasoline futures ETFs…