Mike S. Newton, CIM FCSIHBP Nymex Oil Bear+ ETFHOD.TOCOMMENTAug 11, 2009

Don't forget that it has 2x leverage on the downside. With leveraged ETFs, they're more a trading vehicle than a long-term hold. A 10% loss requires an 11% gain just to get even.

News from Strait of Hormuz is that things are being worked out. Despite 20% of oil being blocked, we couldn't get oil to $150 -- seems there's a lot of oil sloshing around the system. A reopened Strait could see oil normalize substantially lower. A geopolitical bet on what might happen in political negotiations, and that's hard to take a position on.

If you think oil's going lower, this is a way to play it. Rebalance your profits as you go.

The danger is the promise of 2:1 daily exposure in terms of leverage. Because of that daily exposure to rebalancing (buying higher and selling lower), they're bad long-term hold.

This one is a double-leveraged down. For a very, very short-term view. There may be other ETFs, but this is the one he's aware of.

Will both spike when the pandemic is over? Will both spike when the pandemic is over? HOU-T is the upward moving ETF. It is also a two times ETF. The HOU-T is certainly the side to be on today. If the virus news is true then there will be a lot of pent up demand for oil. But he is not in favour of leveraging. These are intended for day traders.

A short-term way of betting against oil. A very leveraged situation, 2 to 1. This is for speculators, not investors, and is quite a bit higher risk.

Double the inverse return of oil. He believes that oil is really close to the bottom. He would take profit here.

Gains value if oil goes down. A double down. Good for short term speculation. If it takes 6 months to get there it might lose you money due to rebalancing.

Double bear ETF for crude oil. Price of oil is already starting to break down. This is a reasonable trade. If we get back to $105 then something has changed with oil.

Thinks keystone ultimately gets done. Thinks nothing will get done until after the 2014 mid-term US elections. 2017 is when we are talking about these things coming on stream. This is a double bear so for short term trades. There is a reasonable trade here. If we break about above $110 this is not something you want to hold.

Oil does well until end of September. Crude oil has gone parabolic, which is unusual. When it hits the peak, look out for the stock market. Everything is positive, don’t short yet, but watch for a move to the downside by the end of August. These vehicles work well when you are in a very strong trend.

Most ETFs you can hold forever unless they use leveraged. This is a double down for oil. You could get a drag of 15% just on the rebalancing. There are a lot of moving parts here. 2-3 weeks at a time, if you are taking a short term view, you can do fine. He is bearish on oil but don’t get into this one.

Talking about the next month trading this is okay as a speculative buy. Watch the oil prices.