What does everyone think about buying gasoline futures?

[kage860]

As we all know, KJs need a lot of gas and I am loving the low price on fuel right now. I was thinking to myself "I wish gasoline would always be this cheap". Then thinking "I wish I can buy all the gas I'd ever need right now". After doing some google searching there is an etf (exchange traded fund) that buys gasoline futures contracts:

UGA: Summary for United States Gasoline Fund LP- Yahoo! Finance

I would love the idea of buying all the gas I would ever need, but I'm going to be spending my money on a house in the near future. I don't know how holding the fund long term would be, there is a 0.93% maintenance cost on the fund and I imagine that you would have to pay taxes on the gains.

Will I look back in the future and say I should have done it? Maybe

 

[mu2bdriver]

Maybe, but probably not. You're going to be so caught up with the house that tracking, trading, or maintaining something like this would be more of a distraction than anything else.

Between the fracking really hitting it's stride here in the US, the Keystone pipeline's prospects looking better next year, and the Arabs trying to keep prices depressed to stall the first two in order to keep their monopoly, just enjoy the prices and your new house.

Who said 'drill baby drill' and the opposition called her an idiot?

 

[profdlp]

You're not really buying the gas, you're just betting that the price will go up before the end of the expiration date. When gas was $4.00 a gallon we all thought that $3.25 looked like a relatively good price. It's lower than that now in most places. (I heard that in Oklahoma there was a place selling it for $1.99 last week.)

If the price continues to fall your investment could cost you. Futures Trading is best left to people who have the time and knowledge of the industry to bet wisely. Your investment in your home is a much better gamble (usually, anyway) and can build you enough equity to make paying for a fill up not nearly as painful.

Futures Pro:

Easy to do both long and short positions
Futures curve allows for more variants of trading strategies
A very wide array of asset classes are available

Futures Con:

The lot size can be prohibitively big on certain contracts for smaller portfolios
Fixed expiration date requires regular trading activity
Trading mechanics more complicated

Source: What are the pros and cons of trading stocks versus futures?