Is It Time To Go Long Or Short Crude Oil With ETF’s?

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November 30, 2009 1:33pm ETF BASIC NEWS NYSE:DIG

oil-etf“Oil recently made big news when crude soared higher than $80 per barrel. The question now for investors is whether this trend


 will continue. The continued weakening of the US dollar could spur a mini-gusher for investors looking to profit from oil, which is among the commodities that tend to be inversely related to the strength of the US dollar. As the dollar dips, the price of oil rises. Indeed, the exploding US debt is putting downward pressure on the dollar, with no change of direction in sight,” Doug Fabian Reports From Money Show.

“Several indicators point towards oil prices continuing to rise in the foreseeable future. First, the futures market is signaling higher prices for oil and gas stocks during the coming months. Second, the dollar keeps falling and putting upward pressure on the price of oil. Since oil is priced in dollars, foreigners can buy oil much more cheaply as the dollar drops. Third, as the US government takes on more debt, investors expect further depreciation of the dollar,” Fabian Reports.

“Whether you think that oil will soar in the future or if you believe that the dollar soon will recover and send the price of oil falling, an exchange traded fund (ETF) is available to meet your needs. ProShares offers both leveraged long and short oil ETFs,” Fabian Reports.

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We have listed some details on the 2 Proshares ETF’s below:

The investment (DIG) seeks daily investment results, before fees and expenses, which correspond to twice the daily performance of the Dow Jones U.S. Oil & Gas index. The fund normally invests 80% of assets in financial instruments with economic characteristics that should be twice the return of the index. It may employ leveraged investment techniques in seeking its investment objective. The fund is nondiversified.

TOP 10 HOLDINGS ( 67.62% OF TOTAL ASSETS)  
 
Company Symbol % Assets
ANADARKO PETROLEUM (APC) 2.06
APACHE CP (APA) 2.05
CHEVRON CORP (CVX) 9.44
CONOCOPHILLIPS (COP) 3.93
DEVON ENERGY CP (OK) (DVN) 1.89
Djusen Swaps N/A 15.37
EXXON MOBIL CP (XOM) 22.05
OCCIDENTAL PET (OXY) 4.25
SCHLUMBERGER LTD (SLB) 4.75
TRANSOCEAN LTD (RIG) 1.83

The investment (DUG) seeks daily investment results, before fees and expenses, which correspond to twice the inverse of the daily performance of the Dow Jones U.S. Oil & Gas index. The fund normally invests 80% of assets in financial instruments with economic characteristics that should be inverse to those of the index. It may employ leveraged investment techniques in seeking its investment objective. The fund is nondiversified.

Chart for UltraShort Oil & Gas ProShares (DUG)

 

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