The BP thread

[drbubb]

i was wondering if you would ever ask...

 

I have bought a few calls / just to get positioned, with more to come later:

 

BPGL : CALL BP PLC JUL 60 at $4.80 // with BP at $62.20 (eqv.=535p x $1.938= $10.37 x 6)

when i could have bought options priced in Pounds earlier today. Why the Dollar calls ?

 

I am taking a bet on the currency too, by purchasing the dollar calls.

 

WATCH what happens.

 

Suppose BP rises from ... 535p to 600p (that's 12.1%)

... and Sterling from $1.938 to $2.20 : then BP rises from $62.20 to $79.20 (that's +27.3%)

 

In a single option, i benefit from the gains in both the stock and the currency.

Of course, i am taking the risk that sterling may decline. but in doing so, I risk only the option premium.

And options are still relatively cheap.

 

(note: having taken this position with BP at my pre-identified "ideal price",

i am going to wait a bit- a few hours, perhaps a few days, before adding to it.

I want to see how the oil price, and the market behave.)

[No6]

Well and truely unloved at the moment. That's what I like to see.

 

ADVFN market report

 

In London, oil stocks weighed, hit by a downbeat update from BP. The oil giant remained a key faller, down 17 pence at 535-1/2 after the UK oil giant revealed disappointing production figures alongside a broadly downbeat trading update for the fourth quarter.

 

BP's oil and gas output in the three months to December fell to 3.82 mln barrels of oil equivalent per day from 4.022 mln boepd last time. In response, an analyst at a leading brokerage said production was "somewhat disappointing" and the large fall in US gas prices reflected the absence of the "seasonal strength" that investors were expecting.

[chas and dave]

BP looking a bit peaky? - energy-wise

[drbubb]

"The oil giant remained a key faller, down 17 pence at 535-1/2"

 

if this proves to be the low close, i will take this as a bull's eye on my 536p target.

 

This was derived as follows:

BP's high.. : 723p

BP's low... : 350p

Difference.: 373p

50% of D..: 186p

add to Low: 536p : target correction low

 

see chart :

[Guest Guest]

This was derived as follows:

BP's high.. : 723p

BP's low... : 350p

Difference.: 373p

50% of D..: 186p

add to Low: 536p : target correction low

 

Is this a general principle traders apply? Or of your own invention.

 

Bought 1500 shares at £5.36, perhaps it will go lower but it is hard to always call the absolute bottom. I am no expert but I think these have been oversold.

[drbubb]

own invention?

 

certainly not. that's just a 50% retracement calculation.

another retracement that we often see, is a 61.8% retracement; calculated as follows:

 

BP's high.. : 723p

BP's low... : 350p

Difference.: 373p

38.2% of D: 142p

add to Low: 492p : target correction low, at 61.8% retracement

[Guest Guest]

Thank you. The reason for asking is that if a lot of traders do the same, especially those with big placements to place then would these breaches of technical levels cause an increaing in buying activity.

 

I suppose I have bought as a medium term investment.

[surfgatinho]

I bought some BP today at 533p But then I was holding the Brent Crude ETF (OILB.L) so I'm quite used to throwing money down the drain.

I really can't see oil staying this low for that long. People are talking as if the stuff is going out of fashion!

[drbubb]

i still think the smart way to play BP is thru Calls on the US$-deominated BP.

 

I own several now: jul.$60, and jul.$65 strike

 

If I lose the whole premium (over $10,000), i will just reinvest from a lower level

[drbubb]

DEFT MOVE?

 

i rolled into the jul.$65calls

 

bought them in two waves:

+ at $2.40- two days ago

+ at $2.20- yesterday

in reasonable size too. Much bigger than my original foray in the $60 calls.

 

Meantime, After today's jump in BP, i sold the $60calls originally acquired at $4.80.

Sold them at $5.10, taking a small profit.

 

i'm more comfortable with the cheap $65 calls, and i'm happy that they are July maturity.

Pleanty of time to go, with very limited risk

[No6]

i still think the smart way to play BP is thru Calls on the US$-deominated BP.

You could be right, but many who come here don't have your experience and skill in playing the options game. Perhaps some are just looking for buying in on what could be a good long term investment opportunity from these lows. Options are for those that know what they are doing and feel confident in understanding how they play out. I'm sure this is still a learning process for many of us.

[drbubb]

BP UP SHARPLY on high volume !

 

BP.L : 547p

BP... : $64-plus

 

The july$65 calls, are now nicely in profit.

 

I do hope some of you got on this bus

[squeek]

New CEO just announced to set off the spike. unfortunately the details of my self cert ISA haven't come in time.

[vinny]

BP UP SHARPLY on high volume !

 

I do hope some of you got on this bus

 

FWIW your general tactic of switching from gold to oil is the exact opposite of what I have been doing for the last 18 months or so. It has so far been a wise move.

 

Despite BP.'s rise - I'm not that bullish on oil or oil stocks. I think we may well see sub $50 oil soon. Not a confident call - and certainly not a widely shared call on GEI.

 

I would expect RDSB / A to confirm the move higher along with the increased volume which is present.

 

Again Doc - a good call (at least short term) , best of luck with BP.

[drbubb]

"your general tactic of switching from gold to oil is the exact opposite of what I have been doing"

 

me too.

i had been emphasizing gold since almost two years ago.

but i am looking to shift slowly towards energy.

i think this shift will take about 3-6 months, and will result in my holding maybe 30-50%

of my portfolio in oil shares, oil service, and coal... plus maybe green energy.

 

i reckon these swings back and forth take 3-4 years from gold emphasis to oil emphasis.

 

btw, most oil shares look overvalued relative to the price of oil.

bp looked like an exception, because of its management-related issues. : bp chart

oil service and coal could represent better valuations.

 

I make these judgements, by looking at ratios.

 

here's the ratio of oil service (oih) to oil sector (xle) ... update

...chart coming...

 

= = =

 

here's some more detail on those bp calls:

jul.$65, symbol: BPGM : closed at: $Bid 3.50 - Ask 3.70 (with BP at $64.64)

 

i bought 70 options, costing an average of $2.32 , that's $16,240

 

My investment of $16,240 controls stock worth: 70x $6.464k = $452,500

 

thanks to the high volume, it looks like BP could go higher. i will be facing that

old question: should i stick with my general rule: "when it doubles, sell half?"

[vinny]

thanks to the high volume, it looks like BP could go higher. i will be facing that

old question: should i stick with my general rule: "when it doubles, sell half?"

 

The short term changes in the volume on the British oil majors has been quite odd in the past year. The volume increases with rallys - but the general trend is down. Perhaps the question to ask here is should the volume be trusted?

 

IF it can, then BP's chart looks short term bullish IMO - as long as the bottom bolly does not get stretched from here.

 

 

------------------------------------------------------------------------------------------------------------------------------------

 

"when it doubles, sell half?" - Almost always a good idea - original stake back and a punt on a trend continuing.

[drbubb]

yes.

selling half is usually a good idea with options.

but i tend to watch volume as a key to see whether the rule should be broken.

 

here, i will be watching oil prices too

[skunkbjj]

Just came across the following on the Telegraph...

 

An independent investigation into BP's Texan refinery disaster has concluded that there were serious structural deficiencies in the way the company managed safety stretching right up to its London headquarters.

 

Lord Browne, BP Texas Ciy refinery disaster

Lord Browne will stand down as BP CEO in July

 

The conclusions will be published on Tuesday in a damning report from a panel led by James Baker, the former US secretary of state, that casts new light on the pressures building up against Lord Browne, the chief executive, before his surprise retirement announcement on Friday.

 

http://www.telegraph.co.uk/money/main.jhtm...1/14/cnbp14.xml

 

Should be an interesting week I think.

[No6]

ADVFN Market Report

 

BP went 4 pence firmer to 545, after it said it has signed an agreement to develop two major gas fields in Oman that could potentially yield about 20-30 trln cubic feet of natural gas.

 

The production sharing contract, which marked BP's entry into the country's exploration and production sector, was signed by Mohammed Bin Hamad Al Rumhi, Oman's oil minister, and Tony Hayward, head of BP's exploration and production business.

[drbubb]

BP-nyse had a good close: $65.22, could well go higher : intraday chart

 

Next target: just short of $66.

If it tops $66, then the lows may well be in.

 

But i may dump some of the calls if it pushes to near $66

[DontPanic]

(1:50 PM ET 01/31/07)

Dow is up 0.20%

Oil is up 0.14%

BP confirms new gas find in Egypt and is down 1.29% to $62.78.

 

Buy now or wait till it goes lower ?

[drbubb]

It closed around $63.50, so perhaps that was the buy.

 

With this volatility, you can see the wisdom in selling half with a 50-100% profit.

My own selling effort was a day late, and $0.75 too high

[squeek]

Last company I've added to my ISA now. Looking cheap, and even if it doesn't go up anytime soon it's still giving 4% dividend yield.

[DontPanic]

Im considering moving to the US soon and before i go want to buy some "safe" shares to put away and only sell when i get back to the UK (tax reasons). Bought Vodafone a few months ago and even though its been struggling to break through 1.50 its still got upwards momentum.

Im still not convinced BP is at the bottom of the long downward slope.

[Tune2001]

Clonk!

 

Shares fall on lower profits. Time to buy some more?