During the 9/11 war oil prices surged and energy stocks followed. Currently the entire market is finally, I say finally, because I shorted it too soon but if I had deeper money longer puts I would be reaping the rewards. My prayers to the Ukraine people. Reading headlines of 10% nuclear war chance seems dreadful. It doesn’t matter how much money you earn flipping houses or in the market if the world is bombed with nukes. Money is worthless at that point so I’m just staying positive that we, including Putin, will get to some point of agreement or end to this conflict. Usually when the USA enters a war we say months but it turns into years. If you view the chart below it shows and energy company following oil.
Just recently, as oil began to spike, oil rig companies that weren’t as profitable now are reopening their unused rigs again for foreign and domestic capabilities to drill. Same thing happened when we had oil conflicts. From my experience in the stock market trends repeat themselves and that’s when you should take notice, journal it, and use it to your trading advantage.
So part of me wanted to invested in long calls on Facebook. It’s still a cash generating machine globally and I really liked my metaverse VR goggle experience even though I’m not a gamer. However, I decided after seeing how energy stocks were up I researched a little more. I came to the conclusion that if this war continues and draws out energy is where to be until it is resolved. So I’m taking a big gamble on beaten down energy stocks that typically follow the leaders around oil prices. We have been living on cheap imported oil for a very long time…
Stocks like RIG, SWN, HAL, XOM
I bought contracts on 1 leap year call options. A whole year to be right or wrong on RIG which predominantly has oil drilling rigs, equipment, and services foreign and domestically. It would actually make a great covered call play at the current price if trends up long-term. I think as long as there is war and conflict we will see a lot of movement in these stocks that have been dead since the end of 9/11.
The real question I have to answer and take action myself is if I’m very right at what point am I happy with my profit and take it off the table. I guess that would be when Putin gives in or his country takes over his country or maybe his army just loses. But, how soon will that happen? You think with all the super tech military drones we have this war would end soon. And what about cyber wars? If Russians have been hacking companies and governments you would think more than ever they would be hijacking everything they can to control the digital e-commerce world creating more problems.