Discussion on several methods of bargain-hunting crude oil
Method 1: Buy crude oil ETFs, including $ oil index ETF- USO $ Brent oil ETF (BNO) $ and so on. The disadvantage of this method is that these ETFs are based on futures rather than physical objects, and there is a long-term premium problem. When the futures price becomes a forward discount, it is the right time to buy such ETFs. Moreover, the management fee of this ETF is slightly more expensive.
Method 2: Buy stocks and ETFs of oil and gas companies and oil service companies, such as $ oil and gas production index ETF-SPDRs & etc. P (XOP)$ $ Huabao Oil and Gas (SZ162411) $ XLE. There is no long-term premium problem in this way, and it can also earn enterprise development and dividends. The disadvantage is that if oil prices remain low for a long time, some enterprises will have operational difficulties and even go bankrupt.
Method 3: Buy crude oil leveraged ETFs, such as $ Velocity Shares 3x Long crude oil ETN (UWTI) $,etc. In the case of unilateral rise, this method has high income, but it will lose money in a volatile city. The management fee of this ETF is slightly more expensive.
Method 4: Buy Russian stocks and Russian stock ETFs, such as $ Russian ETF-Market Vectors (RSX) $ $ Qiwi (Qiwi) $ $ Yandex (YNDX) $ $ XDB Russia (03027)$LUKOIL OGZPY. The Russian market is currently the cheapest market except Greece. Buying Russian stocks can not only benefit from rising oil prices, but also benefit from enterprise development and valuation repair. But there are also risks of political, economic recession and poor enterprise management. Worried about political risks, you can also buy Norwegian ETF $ global x MSCI Norway ETF (Norway) $ and so on.
Method 5: Buy derivatives such as futures and options. Because of the forward premium in futures, there is time loss in options. Unless you have the ability to accurately predict the price of crude oil, you'd better not play with such derivatives. However, I hold a short position in a futures put option whose strike price is much lower than the current price. This strategy is suitable for oil prices hovering at a low level. If the oil price is significantly lower than the execution price when it expires, it will face a large loss, which may even be dozens of times the commission in theory. If the oil price rises sharply in a short time, the income is not as good as other methods. Using this strategy requires great caution.