The world has been rocked by the head-spinning decline in the price of oil recently, and many oil producing nations and companies are feeling the pinch. This sudden drop in the price of oil has lead to the old adage, “Buy when there’s blood in the streets,” ringing true for more and more people in the commodities market. This phrase has long been held to be true by speculators and investors who seek to buy the assets of a declining market, such as in this case, oil.
Though the price of oil has been volatile recently, this has not always been the case, and the trend doesn’t always have to be downhill. What this means for eager investors is the potential to buy low and sell high, thus profiting through the well-known market cycle. This cycle happens often in the oil market, meaning this is a great time to buy, given that the price of oil is currently low.
Fear not potential investors, for there are various ways to go about investing in oil. One of these routes could be the purchase of stocks in oil companies. Shares of various oil-producing companies are usually the staple of any portfolio. Stocks can provide steady income and are relatively low risk considering some of the options involved in oil market.
Options are another way in which to get involved in the oil market. Options are contractual agreements, and they provide the potential for a quick return on investment. By buying options at a certain strike price, if oil falls below that price, investors may be able to exercise their option and still profit off their purchase. This is an ideal way to play the market without taking any tangible risks.
Finally, oil futures are another way that people can get involved in the oil market. Through buying a certain future at a certain price, the investor is essentially making a bet on the direction of the market. Futures are also big money investments and should never be undertaken lightly.
Oil has long been the staple of the global economy; in fact, it’s been referred to as “black gold”. When the price of oil is low, now is the time to take advantage of the situation. Investing in oil can be a great way to secure one’s wealth, and given the current fluctuations in the market, this is a great time to buy when there’s blood in the streets.