Chip

iTrader: (3)

I know nothing about buying and selling commodities (including how to spell it, lol)

Given that it IS inevitable oil prices are going up and up, how do I go about buying a few grand of crude "shares" ?

Turbosystems

iTrader: (5)

you may know nothing about buying and selling but you do know how to spell it

RichardPON

Buy a derivative.

Go long on the price with a reuptable spread bet company if you're so inclined, and you can benefit from no tax, and margin trading.

Rolls

iTrader: (2)

Was pretty mad here yesterday watching the prices keep on rising through $130!

Chip

iTrader: (3)

Rich, im a total newb at such things, does that involve you naming a specific time period though? As opposed to just buying the stuff and deciding when you want to sell it like shares?

DaveZS

No, you 'buy' and 'sell' when you want. Only thing to consider is putting stops in, as you could lose alot more than you bet.

Chip

iTrader: (3)

Links to more info please?

I dont want to bet at a window, and if the price goes higher than ive guess i lose money too, i just want to be able to buy a grands worth of crude (for example) and then decide when I sell it for whatever the going rate is at the time, which I dont see how can lose me more than i bet unless the price went negative.

Fair enough if it doesnt work like that, but thats what I want to do so just finding out if its possible to just "buy" in the regular sense of the word rather than all this spread bet and futures nonsense that I dont really like the sound of, lol

Fil

even oil shares aint good, have some in iec were 18 quid each last year currently 9pound each today! bugger

Rolls

iTrader: (2)

Some companies are!

DaveZS

You don't bet at a window, you either buy long (for an increase) or short (for a decrease). So if you think the share price will increase, all you do is buy long and decide what value you want to put on each point it moves.

Say you wanted to bet on BP. If you did it a Ł1 per point and went long, for every point the share goes up you would make Ł1 (minus any fees etc). You don't actually own the shares, you just bet on which way they will go.
But, you would lose Ł1 for every point they drop.
eg, the share price for BP opens at 650. You go long at Ł1 per point. They close at 670, you make Ł20.
If they were to dip through the day then you would be losing money.
eg, they open at 650 so you go long again. They go up to 660, so your Ł10 up, but then they drop to 620, so you would be Ł30 down. You could but a stop in so that once it reaches a certain level you wont lose any more money.
Say you put a stop in when the share price hits 630, you only stand to lose Ł20 that way. If it reaches this amount then your bet is pulled and you stand at -Ł20. Its all about how big your bollocks are as if you let it run without a stop, the price could have increased again and you could have been back in profit, but as it reached your limit (if you had one) your bet was pulled.

Properly over simplified, so i hope it makes sense

Edit, check out http://www.igindex.co.uk/

alan12112

Thanks dave that makes alot of sense to me

Chip

iTrader: (3)

Dave, I understand how buying long and short works, thats NOT what I want to do though, I just want to buy some oil as a commodity thats all, so just wondering if thats possible.

What you are talking about you have to put an end date in I believe?

I dont want to do that, I just want to own some oil, for as long as I choose to own it, and im not sure if thats possible or not, im guessing not as obviously if I own 100 barrells of oil, i have to find someone to store them, lol

Punkie

Chip doesnt want spreadbetting

Chip

iTrader: (3)

I dont want spread betting at all.

Porkie

iTrader: (1)

er why not? its simpler, cheaper, easier and tax free. NO downsides

we were talking about oil this morning.... consensus was to short it in short term...

even some Qatar minister was saying how over done it is at moment only this morning.... although I was only half reading it to be honest

Chip

iTrader: (3)

Can you do a totally open ended spread bet? I was under the impression you cant.


I dont want to decide NOW when I want to sell, I just want to own some to sell when I feel like it, like i do with shares.

Chip

iTrader: (3)

PS

I would agree on the short in the short term though, im sure there will be a "correction" of some sort soon as no dobut the fact its going up as led to it going up further like it does with anything else peopel trade.

Punkie

You can keep rolling it over Chip...may be a small charge to do so with some companies

Chip

iTrader: (3)

If thats the case, surely you could keep rolling it over till the day you die and never lose money on it?

Surely someone must know the details of such "small charges" etc

Punkie

Because you're trading on a "margin" the company you chose to spread bet with will require you to have a certain amount of money in your account to keep the bet open.

If the money isnt in your account within the required time period I'd imagine they could close your spreadbet and then reclaim the debt in the usual way a debt is reclaimed.

DaveZS

Exactly

You don't decided 'NOW' when you want to end it, you end it when you want to end it
Or at the close of the day/when it reaches a limit if you have those in place.

Chip

iTrader: (3)

Ok Dave, thanks for the education, are they arent ongoing fees while you "leave it open" with the money in the account, or is just the fact its not an interest bearing account what covers that side of it?

Chip

iTrader: (3)

Essentially, what I would like to do ideally.

Is set up a monthly "direct debit" type arrangement where by each month I buy one barrell of oil at whatever the going rate is that month, and just leave that running until I change my mind.

Is that possible without losing all my money in fees?

foreigneRS

why not cut out all the middle men and just put a big tank under your garden and fill it with a couple of gallons of diesel per week?

Punkie

Might be worth you looking at Exchange Traded Commodities in that case Chip...

http://www.etfsecurities.com/en/secu...securities.asp

Some companies offer "Regular Investment" plans with reduced trading costs.

Chip

iTrader: (3)

Thanks punkie, although would prefer a firsthand recomendation from someone who is doing similar if anyone is?

Phil

iTrader: (1)

This is a cosworth site chip - most people get through oil faster than they can afford it anyway, let alone stock pile it

Chip

iTrader: (3)

DaveZS

I've always closed them at the end of the day, so i don't know. When i get home ill have a look see if i can find out for you.

Chip

iTrader: (3)

Thats great, thanks

Punkie

Do you mean if you keep a spreadbet running overnight? Does it charge you?

Chip

iTrader: (3)

I want to be able to buy some oil, pay a nominal fee, then own that without further costs, until I chose to sell it.

Not sure whats so confusing TBH, seems like a REALLY simple concept, so I just need someone to say if they know how I can do that please? (if its possible at all)

RichardPON

Sort of. The commission is adjusted into the price of the spread.

For example, if you buy a quarterly contract, then you end up with a worse price than a day purchase when you open, and similarly at close.

Chip - I would say the spread bet would be good for you, for the benefits of being tax free, and being able to trade on margin.

Just ask me if you have any questions - it's sort of my area!

Chip

iTrader: (3)

I dont want a contract with ANY end period though, not daily or quarterly.

PON, if you could point me at somewhere I can setup a direct debit to buy one barrel of oil a month, hold it indefinately and not get raped too badly in fees, that would be awesome

RichardPON

To be honest mate, you can't really purchase wholesale in that manner and expect anything but hassle.

The markets mean that if you're speculating, you're speculating on price rather than true value, so it's always going to be more prudent to speculate using a derivative, as these are geared specifically towards earning money from a commodity without owning it.

I don't think you'll find many people keen to set up that kind of arrangement as it's not particularly usual, and there's not really anything in it for either party over the short term.

If not spread betting, then maybe a CFD provider, or purchase a future.

DanW@FastFord

iTrader: (1)

Speculating on oil prices in one of the reasons why the cost of fuel's going up!

GGR*TUNED

you could trade in warrants if you're looking at buying or selling the longer term price of a commodity, for example
http://www.sgwarrants.co.uk/services....php?code=SV06

expiry date is november next year, so you could just buy or sell the contract and then just forget about the trade for a year.

Chip

iTrader: (3)

Thanks very much for the info everyone

dojj

iTrader: (3)

you are taking this "madmax" thing way to seriously chip

i think i understand what youare on about but the fact that it's going to be virtually impossible to actualy "buy" a barrel of oil from someone for a set price to put in your garden until you decide to sell it

Paul Eggleton

Chip, oil is naturally traded in massive quantities and joe blogs buying a barrel doesn't happen.

As I work in energy and energy procurement I've spreadbet on oil for a bit of fun and done nicely out of it. I used www.tradindex.co.uk

It also allows you to create a virtual account so you can have a play without real money too.

Fundamentally oil is going to continue going up as global demand will see to that. My concern with spreadbetting now on shorter contracts, which you've also stated you don't fancy, is that speculation is causing it to rise faster than it should fundamentally, which means there will the odd correction which could catch you out if you are betting over a short period.