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Old 04-15-2005, 01:57 AM
inishowen inishowen is offline
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Join Date: Apr 2005
Posts: 35
Default Re: investing in oil

Futures trading is tough, bro, not a part time thing. Exxon (xom) and Chevron (cvx) both move basically with the price of oil. Granted, because they are stocks and not the commodity itself, you will experience market volatility along with volatility in the price of oil. Overall though, their beta (measure of volatility relative to the market as a whole) is about half what the broad market is. Check their charts vs the price of oil vs the S&P 500 and you'll see what I mean. Another more broad-based, inherently less risky, choice would be XLE which is a SPDR comprised of the top companies in the oil-oil services sector. With one investment you own xom, cvx and about 10 other oil related stocks representing a de facto bet on the future direction of the oil index. These 3 I've mentioned all trade options so if the underlying stock movements aren't sexy enough for you then you can get your gamble on with an option if you are convinced oil will move higher, quickly. Do your homework and good luck.
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