I've never invested in anything before. I just occasionally think "this would be a good idea" I remember when Red Bull first came out and I was in high school, I predicted they'd become more popular than soda, and I was right (although it was monster that really came to dominate the market, this was, I believe, before monster). I thought the same thing about Apple when I saw how popular iPods were becoming, also in high school, and investing at that time would have indeed payed off huge as the company really took it to the next level with iPhones and such. But I was just a kid and I basically just casually thought of these things, I didn't try to convince my parents or anything. I probably should have. I don't see this low oil price as a big opportunity like the above examples, but I see it as an opportunity to finally get my feet wet and learn how to play the game. First of all, how does price work compared with company share prices? (I assume that's what I would be buying) just because the price of oil is down, does that necessarily mean the share prices are lower, and hence the opportunity? All I know is gasoline is really cheap now, and I think it's bound to go up by a good percentage in a relatively short amount of time, and I want in on that action, even if it's just a taste. What should I be looking into, oil companies and their stock prices? If I've said anything stupid I apologize, I'm very green to this and would appreciate any advice or insight I could gain from anyone here with the knowledge and experience.
You can effectively buy the tracked oil price on the stork market using the code OOO That's better than buying oil companies, which may or may not track the oil price.
So, I guess I need to be looking up online brokers or something, not sure how that all works. When and how will I be using this OOO code? And how do I track the price of it?
It's just like any ASX share code, and you buy sell and track it like any other share listed on the Australian stock market. Use whatever broker you like, like Comsec et.al
Now I'm reading about call options, after doing algebra all day, I feel like my brain is about to collapse. The two subjects always have been very boring and very taxing to my mind. I mean the subjects in a very broad sense of course, not just specifically those things lol but at the same time, I know they're both important. Not in the sense that we use algebra a lot but math is the language of the universe, and the other is the world of money and finances. I just wish I had learnt more about it in school. I did take an economics class though, and got to pretend buy stocks. I chose Budweiser as the Super Bowl was coming up, but oddly enough, it didn't rise much (if at all). I don't remember exactly how I came out in the end, but I know it wasn't really much of an (imaginary) gain or a loss.
Options are a very simple derivative. They basically give you the option to buy or sell the underlying security at a later date and given price (strike price). Generally buying CALL options means that you expect the price to go up, PUT options means you expect the price to fall. However if the expiry date is reached and the price went the opposite way (above or below the strike price), the options are usually worth nothing. Most options can be sold at any time before the expiry date. I use this calculator to determine potential profits or loss. http://www.optionsprofitcalculator.com/calculator/long-call.html
there's an equivalent US etf (a quick Google will give you the code). You can also buy an ETF that's a compound of all the small oil exploration companies which will boom if the price goes back up. The small cap good miners ETF was up 40% this year when I last checked.
I would also point out that some people are calling for lower oil prices. I've heard serous people with a straight face talk about $30 oil. Despite prices US oil production is going up. There will be a big bump when the bottom is definately in and then a fall when people rake profits and realise that even though things aren't going to get worse oil is still crazy low. Buy the first dip after the confirmed bottom is in would be my expertly amateur advice.
I'm not seeing anything to suggest that oil price has found a bottom. It's been consolidating between $44-$46 recently but unless to gets above $50 then $40 is more likely in the near future.
Hi Sonic, It is best to leave anything that has had a price collapse well alone. The bottom could be a long way down from here because there is still residual energy in the market. People still have a fixation on oil being worth $X and as it is trading Y% below this then it is a good price. Bad move. This energy will dissipate over time leaving a lot of people broke. The capitulation of the dow index in the 30's did not happen overnight. During the rout, there were times where it rose by 20% which gave false hope. On top of this, do not forget that the Euro currency also had a price collapse recently as well. This does not bode well for the near future when 2 major economical entities collapse at the same time. We are in a deflationary spiral and cash is always kings at this time.
You will have to wait until the U.S. bond bubble collapses....and then wait for the U.S. dollar collapse.....and then all...and I mean all tangibles will rise...in U.S. dollar terms. It is the U.S. dollar that will take the most time because it will be the last to fall. It will go to an all time high...don't believe the dollar to zero crowd...eventually they will be right but it is going high first....just like final moments of the brightest star before supernova, it expands way past its normal boundaries. It is this rush to the U.S. dollar that will kill the U.S. economy and serve to keep oil low for some time. The policies of the European governments are all deflationary. It is time to hold cash, and some gold sovereigns, but not in the bank.
Wow.. oil was the winner.. big up! 7% increase ($3.13!) impressive.. was hoping to buy in cheaper.. oh well i got mining stocks instead will buy if it does pull back sub 40 -- was also expecting oil to stay low until the Saudis were confident players had left the market reducing their competition and the oversupply situation abound in WW oil currently.
I feel like im about to ask a real dumb question but why cant I see a price history chart of OOO anywhere? Current price of $23.60 also confuses me - how does that correlate to cost of crude which is around US$40? Is this the only oil stock (not oil company stock) on ASX?
OOO is a synthetic ETF - the price is correlated to the crude oil price, but it's not a 1:1 match. Chart: https://au.finance.yahoo.com/q/bc?s=OOO.AX
