So Light, So Sweet!

SO LIGHT, SO SWEET!….A reader writes concerning my post last night about the Tierney/Simmons bet on oil prices:

If you are serious about taking up Simmons’s side of the “original bet” against Tierney, you should simply buy futures or options.

For example, you could buy a call option for Dec 2010 on 1000 barrels of crude oil for about $5,800 (yesterday’s prices). If the price indeed goes up to $85, you would make a $15,000 profit…even better than what you’d get from Tierney.

http://futures.tradingcharts.com/marketquotes/index.php3?market=CL

Go ahead, take the plunge…you can even blog about it!

He’s right, of course. This didn’t occur to me because my most sophisticated financial transactions in the past have mostly involved flipping a coin to decide which mutual funds to invest my 401(k) in. Call options on light sweet crude never showed up as one of my choices.

But it’s a good thought, isn’t it, for someone who thinks we’re likely to see oil production peak sometime in the next few years? I wonder if I can talk Marian into this….?

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