Recs
September 17, 2010 – Comments (2)
XLE @54.34
Put the proceeds in DIA @105.88.
As always, the short is protected with a call option.
This one's a little confusing. Dow stocks XOM and CVX are the biggest holdings of XLE. Seems like you're fighting yourself with a chunk of the pair trade.
Glad to see you're using protection and practicing safe shorting.
Disclosure - long CVX
Yes, 10% of DIA is oil. If it were a pure anti-oil bet, my hedge should have been a little stronger.
It is hard to find a good ETF that's entirely stripped of petroleum while still being a good proxy for the overall market. DIA is as good a choice as you are likely to find, and apart from the 2 ugly losers, all the rest are excellent choices.
As a side note, CVX is probably the best of the breed. If I had to bet on the survival of one oil company, I would bet on CVX.
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