T2K Posted January 9, 2015 Share Posted January 9, 2015 It's $2.01 here in my neighborhood today. VWENX is up $0.72. Keith Quote Link to comment Share on other sites More sharing options...
Coytee Posted January 9, 2015 Share Posted January 9, 2015 If you read my comment, what will happen is other countries will follow suit with shorting stocks, or selling "puts". If you're not familiar with what that is, it's when you hedge against the market going down. To "put down" the market means to sell a stock or commodity hoping it drops. Then when it does, you cover (buy) the stock at the low end and gain the profit from selling high and buying low. Opposite effect: To "buy calls" means to have the option of purchasing a stock or commodity at a specific price as the stock/commodity rises. It's an "option" where you hedge the market as it goes up. So you pay the premium of the call which could be pennies on the dollar, and then purchase the stock at that price break and as it goes higher and higher,you gain more money. In case a casual reader sees this and is intrigued enough to do something, I thought I'd clarify it a bit. Shorting a stock is bearish in that you think it's going to go down so you want to sell it now (high) with the hopes of buying it back later at a lower price. Selling a put would be considered more BULLISH than bearish in that, if you sell a put (think of car insurance), you are obligating yourself to buy the underlying asset at a predetermined price for a predetermined length of time. If on the other hand, you PURCHASE a put (which is the total opposite), you now have the right to "put" the asset onto someone else and hopefullly, make a buck. The car insurance analogy: Every six months, you send $500 to the car insurance. You are "buying put insurance". if you have a wreck, you have the RIGHT but not the OBLIGATION to "put" that loss onto the insurance company. They in turn, have the obligation to cover your loss (pursuant to the contract, blah blah blah) What happens from the perspective of the insurance company? They are selling you the insurance based on their word. There is no underlying "gadget" that you are purchasing. you are simply buying peace of mind. If you never exercise your contract, the insurance company keeps your $500 free & clear and you do it again. For the sake of analogy, you can take the word car insurance and replace it with stock insurance. So if you SELL a put, you are now playing the role of the insurance company and don't really want the price to go down as you will end up buying the asset. If you PURCHASE a put, you are now playing the roll of the car driver and have the safety of knowing that you are guaranteed a certain value for your stock for a certain amount of time. If the stock stays or goes up, you will not put it onto the insurance company (if you don't have a wreck, you will not submit a claim) If you SELL the put, and the stock stays or goes up, you will keep the premium. If you SELL the put and the stock goes down, you will get exercised and you will buy the stock. one nice thing about selling puts is no matter what happens, you DO end up with a cash asset. You end up with 100% cash (the premium) or, you end up with the underlying stock (and get to keep the premium) however, the underlying stock could be trading at the exercise price or, it could be trading substantially less than that price, putting you into a net loss situation. he is also right in that one never need actually plan to buy/sell the underlying assets, you can "simply" (hahahahaha) trade the options. Realize though that you WILL get caught somewhere or another at some point or another and end up with the underlying asset so you should always set it up where you are 'ok' with that reality. This way you can view it as a win/win. Sorry to write a book but the terms used mated with "long" or "short" have very distinct and opposing meanings so I wanted to clarify what Jim was saying. It can be simplified to read: Long call = bullish Short put = bullish Long put = bearish short call = bearish Quote Link to comment Share on other sites More sharing options...
Jim Posted January 9, 2015 Share Posted January 9, 2015 Coytee, I should proof read what I write more often. You are 100% in correcting me. My point is to ultimately mean that it doesn't matter at this point in time for us as individuals, as the corporations are going to make the money,and have come out recently stating the same thing on why they aren't worried that much about oil prices tanking. Quote Link to comment Share on other sites More sharing options...
Coytee Posted January 9, 2015 Share Posted January 9, 2015 Well, I wasn't interested in correcting you per se' but rather, simply clarify it in case a casual reader "read it on the internet" and decided to open an options trading account.... Back on topic: I just filled up both cars yesterday, regular = $1.98 Quote Link to comment Share on other sites More sharing options...
Jim Posted January 9, 2015 Share Posted January 9, 2015 we are at $1.83 in my neck, and in a few towns over $1.69. Quote Link to comment Share on other sites More sharing options...
CECAA850 Posted January 9, 2015 Share Posted January 9, 2015 Here in the largest oil and gas producing area in the country we're roughly at 1.98-1.99/gal. You can't swing a cat around here without hitting a refinery yet we never have the cheapest gas in the US. Higher taxes driving it? Who knows. Quote Link to comment Share on other sites More sharing options...
Paducah Home Theater Posted January 9, 2015 Share Posted January 9, 2015 http://www.talkmarkets.com/content/us-markets/guess-what-happened-the-last-time-the-price-of-oil-crashed-like-this?post=53841&utm_source=outbrain&utm_medium=referral Not familiar with the source, but interesting. Quote Link to comment Share on other sites More sharing options...
Jim Posted January 9, 2015 Share Posted January 9, 2015 If your state is anything like ours, politicians bilking retirement, school, road funds for personal agenda as well as the Turnpike and Port Authority raising fees for bridges and tolls stating they are broke, then it's definitely taxes being raised. We have just about the lowest gas tax in the nation, but they are trying to raise it due to saying they aren't raising other taxes, so they have to find somewhere else to do it. Hello gas.And they are also trying to get a mileage tax based on how many miles we drive. Quote Link to comment Share on other sites More sharing options...
eth2 Posted January 9, 2015 Share Posted January 9, 2015 $2.59 in Upstate New York. Love it here. Quote Link to comment Share on other sites More sharing options...
Fish Posted January 9, 2015 Share Posted January 9, 2015 $1.93 Its great...but really the lesser of the worlds problems even at double. Big things in the next 10 years, most not good, some really bad. "There's a Monster on the loose, got our head into the noose" Steppenwolf. Quote Link to comment Share on other sites More sharing options...
BigStewMan Posted January 9, 2015 Share Posted January 9, 2015 (edited) I do care about the employees that may have to be laid off due to lower cost of fuel. is this happening? I generally don’t watch the news and finances really bores me so correct me if i’m wrong here … if the oil companies are purchasing the product that they’re refining at a cheaper cost, and the selling price drops proportionally--wouldn’t their profit remain constant? I mean, it’s not like they’re paying the same price for crude and being forced to drop gas prices. Right? Edited January 9, 2015 by BigStewMan Quote Link to comment Share on other sites More sharing options...
Fjd Posted January 9, 2015 Share Posted January 9, 2015 (edited) I do care about the employees that may have to be laid off due to lower cost of fuel. is this happening? I generally don’t watch the news and finances really bores me so correct me if i’m wrong here … if the oil companies are purchasing the product that they’re refining at a cheaper cost, and the selling price drops proportionally--wouldn’t their profit remain constant? I mean, it’s not like they’re paying the same price for crude and being forced to drop gas prices. Right? There is potential job loss for the companies that are heavily investing in shale fracking as oil prices would need to be somewhere between $40 - $70 a barrel for these companies to keep the pipelines open (I know it's somewhat boring, but I tried to give an overview of the oil commondity market in a previous post); however, I would not think there would necessarily be much job loss this immediate year given that Wall Street has essentially become the largest casino in the history of the world. At this point, many of the major players in the shale oil industry have already locked in high prices for most of their oil production for the coming year through derivative contracts. From what I have read, Noble Energy and Devon Energy have both hedged over three-quarters of their output for 2015 and Pioneer Natural Resources has disclosed that it has derivative contracts through 2016 covering two- thirds of its likely production. Companies such as these are protected; however, for every big winner of a derivative bet, there is a big looser that has entered into the contract. The losers are most likely going to be the Wall Street banks as those firms have the resources to enter into these derivative contracts and those companies that decided to enter into an oil price "today" in anticipation of higher oil prices "tomorrow." Given the above, not all shale oil producers have entered into these derivative contracts and those that have not could stand to lose. I have read where Continental Resources (the U.S. driller that bet big on North Dakota’s Bakken shale patch when the competition was looking abroad) cashed out approximately $4 billion in hedges last fall gambling that oil prices would go back up. However, I would tend to believe though that with lower oil prices, various products such as lubricants, pharmaceuticals, plastics, chemicals, and synthetic fibers, etc. will all be much cheaper to produce. These lower prices should stimulate demand and jobs at many places such as Boeing, Dow Chemical, FedEx, UPS, Apple, John Deere, Caterpillar, General Motors, Ford, GE, Xerox, Microsoft, etc., should all increase. Essentially, our economy is still much different than Saudi Arabia and other European countries in that the U.S. uses all the oil that it produces and imports more. Overall, the lower cost of oil should give Americans more spending cash to consume products, for which more consumption will increase demand. While nothing is straight forward, simple or easy when there are competing agendas, typically the increased demand drives production, which should ultimately lead to more jobs. In addition, when companies’ costs of production and delivery channels for products cost less, there is an opportunity for higher wages. Edited January 9, 2015 by Fjd Quote Link to comment Share on other sites More sharing options...
BigStewMan Posted January 9, 2015 Share Posted January 9, 2015 Thanks for the explanation Fjd. By the way, I wasn’t meaning that you were boring…just money, benefits, insurance…all that grown up stuff just bores me. i have three pensions and can’t hardly explain a one of them…as long as i can keep buying guitars i just figure everything is fine in the world. Quote Link to comment Share on other sites More sharing options...
Coytee Posted January 9, 2015 Share Posted January 9, 2015 Thanks for the explanation Fjd. By the way, I wasn’t meaning that you were boring…just money, benefits, insurance…all that grown up stuff just bores me. i have three pensions and can’t hardly explain a one of them…as long as i can keep buying guitars i just figure everything is fine in the world. Ok, c'mon... we're amongst friends here. He's boring. Unfortunately, he's not AS boring as......, ........., .........., ..........., ......... nor myself! I suddenly feel sorry for my wife... 1 Quote Link to comment Share on other sites More sharing options...
twistedcrankcammer Posted January 10, 2015 Share Posted January 10, 2015 Filled up in Roundhead, Ohio 4 days ago for $169.9 a Gallon... Life is good! Rog Quote Link to comment Share on other sites More sharing options...
Coytee Posted January 10, 2015 Share Posted January 10, 2015 Filled up in Roundhead, Ohio 4 days ago for $169.9 a Gallon... Life is good! Rog Hmmmm.... I think I found the person that needs to buy my bridge.... Quote Link to comment Share on other sites More sharing options...
Ceptorman Posted January 10, 2015 Share Posted January 10, 2015 1.52 on the south side of Indy Quote Link to comment Share on other sites More sharing options...
Mallette Posted January 10, 2015 Share Posted January 10, 2015 is this happening? My company alone has had to lay off 1400 young family wage earners whose qualifications are mostly as McDonalds or WalMart outside the drilling business. Present projections are we will likely lay off another 3000 by mid year. Most of these guys won't be able to afford gas no matter how cheap it gets. Enjoy it, but bear in mind that as we stop drilling the supply will eventually catch up from already producing US wells. Foreign oil remains cheaper, so we will again become dependent. There is a price to pay for everything. Dave Quote Link to comment Share on other sites More sharing options...
twistedcrankcammer Posted January 11, 2015 Share Posted January 11, 2015 is this happening? My company alone has had to lay off 1400 young family wage earners whose qualifications are mostly as McDonalds or WalMart outside the drilling business. Present projections are we will likely lay off another 3000 by mid year. Most of these guys won't be able to afford gas no matter how cheap it gets. Enjoy it, but bear in mind that as we stop drilling the supply will eventually catch up from already producing US wells. Foreign oil remains cheaper, so we will again become dependent. There is a price to pay for everything. Dave Dave, It doesn't matter anyways, the POS POTUS is planning on hiking gas taxes!! Won't be cheap for long, somebody has to pay for his financial restructuring of banking and his vacations, just not him.... Rog Quote Link to comment Share on other sites More sharing options...
Fish Posted January 12, 2015 Share Posted January 12, 2015 Famous quotes of the past..."we can't drill our way to cheap gas" It will be 10 years before we would even see the bennifit. $35 to fill up, $70 just a little while back. $1.85 with cash back. Southern IN. Quote Link to comment Share on other sites More sharing options...
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