HEDGING A SHORT CRUDE POSITION: 2 STOCKS TO CONSIDER

Posted by OilPrice.com

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Oil collapsed from $7 from $105 – $98 in the last 7 trading days. Josef Schachter sounded the alarm on Oil decling at this year’s Outlook Conference. The price breakdown over the last few days has shown he was right. Moreover Josef thought it can go a lot lower too. With Josef’s 35 years of experience in oil and gas investment management for Institutional firms, I keep an eye out for articles that fit his scenario. This one by OilPrice.com fits the bill for someone wanting to play a decline in Oil in a more conservative manner. – Editor Money Talks

Hedging A Short Crude Position: 2 Stocks To Consider

Screen Shot 2014-03-12 at 11.38.57 PMHedging is a concept too often misunderstood, or worse, badly executed. To many investors and traders, a hedge simply consists of a trade that directly opposes their main position. They may be long a portfolio of stocks, and then buy puts on an index, for example. To my mind this isn’t hedging, it’s just effectively cutting your position size. You could achieve the same thing by just selling some of your stocks. A good hedge is one that gives some degree of protection against an adverse move in your position, but still has a chance…

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