We did a little number crunching on today’s market results and found the following: Only 8% of all exchange traded funds made gains today, while 41% of energy sector exchange traded funds made gains in trading.
An audio podcast of this article is available at: poweropt.com/podcasts/2007_10_16_EnergyETF.mp3
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Below is a table showing the data on a wide range of energy sector ETFs. Not all of these ETFs are optionable, but it shows the energy sector with 41% advancing on a day when the NYSE saw only 29% of its stocks gaining ground.
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Rationale for Energy Sector Gains:
Oil, it should come as no surprise, is now trading at around $88 per barrel. This price is not yet to historic inflation adjusted highs. To reach the equivalent of what we were paying in 1980 for a gallon of gas, prices would have to drift up to between $95 and $102 per barrel. Many analysts and economists consider this to be more or less an eventuality.
The transportation sector, largely seen as the great prognosticator of DOW growth, is off a little and may indicate a wider cooling in the general market. The energy sector, although somewhat affected by the market as a whole, may see gains.
If you agree with this sentiment and want a way to diversify risk, energy sector ETFs might be a way to do it. Also many ETFs offer options, so investors can take advantage of their speculation using the covered call investment strategy.
Potential Covered Calls on Energy Sector ETFs:
Below is a quick search done using the powerful tools found exclusively at www.poweropt.com. This entire process of researching covered call options on energy sector ETFs was a snap using the PowerOptions custom portfolios and the SmartSearchXL search engine.
|Power Options Covered Call Search Data – ETFs|
|XLE||78.00 (+0.20)||XTGLC||07 DEC 81.0 (67)||2.58||75.42||3.3||3.4||7.4|
|PBW||23.60 (-0.07)||PBWLX||07 DEC 24.0 (67)||1.2||22.4||5.1||5.4||7.1|
|XLE||78.00 (+0.20)||XTGLB||07 DEC 80.0 (67)||3||75||3.8||4||6.7|
|XLE||78.00 (+0.20)||XTGLA||07 DEC 79.0 (67)||3.5||74.5||4.5||4.7||6|
|XLE||78.00 (+0.20)||XTGLZ||07 DEC 78.0 (67)||4||74||5.1||5.4||5.4|
|PBW||23.60 (-0.07)||PBWLW||07 DEC 23.0 (67)||1.75||21.85||7.4||5.3||5.3|
|PBW||23.60 (-0.07)||PBWKX||07 NOV 24.0 (32)||0.75||22.85||3.2||3.3||5|
|XLE||78.00 (+0.20)||XTGLY||07 DEC 77.0 (67)||4.6||73.4||5.9||4.9||4.9|
|XLE||78.00 (+0.20)||XBTLX||07 DEC 76.0 (67)||5.2||72.8||6.7||4.4||4.4|
|OIH||200.15 (-0.96)||ODLKT||07 NOV 200.0 (32)||8||192.15||4||4.1||4.1|
|XLE||78.00 (+0.20)||XBTLW||07 DEC 75.0 (67)||5.85||72.15||7.5||4||4|
|FXN||22.89 (+0.02)||FXNLW||07 DEC 23.0 (67)||0.75||22.14||3.3||3.4||3.9|
|XLE||78.00 (+0.20)||XBTLV||07 DEC 74.0 (67)||6.55||71.45||8.4||3.6||3.6|
|XLE||78.00 (+0.20)||XTGKZ||07 NOV 78.0 (32)||2.7||75.3||3.5||3.6||3.6|
|PBW||23.60 (-0.07)||PBWLV||07 DEC 22.0 (67)||2.35||21.25||10||3.5||3.5|
|XLE||78.00 (+0.20)||XBTLU||07 DEC 73.0 (67)||7.3||70.7||9.4||3.3||3.3|
|PBW||23.60 (-0.07)||PBWKW||07 NOV 23.0 (32)||1.3||22.3||5.5||3.1||3.1|
|OIH||200.15 (-0.96)||ODLKS||07 NOV 195.0 (32)||10.95||189.2||5.5||3.1||3.1|
For more information about how to identify and research great option trades, visit the PowerOptions website. There you will find the data you need to make quick, clear, and informed decisions. You can trade knowing you have found the best investment. Also, PowerOptions will allow you, with a few quick clicks, to quickly and accurately compare trades. PowerOptions‘ premium customer support is second to none in the industry. They can be easily contacted when you need them at their toll-free number to answer customer questions. Call them now toll free at 877-992-7971.
[tags] covered call investment strategy, covered call options, investment strategy, poweroptions, trading etf’s, exchange traded funds [/tags]