Question on rolling oil stocks, more precisely Murphy Oil

Are you talking MUSA or MUR?

MUSA-> downstream convenient store/gas station.

MUR-> O&G drilling and production

quote:

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Am I correct to assume you simply buy oil stocks when gas prices are low and sell it after gas prices have gone up? then hold in cash and wait for gas prices to go down again?

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I wouldn’t say “simply”, mainly because low is a purely relative term. How low is low enough to buy and how high is high enough to sell or short? Typically rolling strategies involve some form of technical analysis. At one time (about 20 years ago), I used Telechart’s TC2000 software package to develop some rolling stock strategies off of various shorter term technical indicators. Typical holding period was 2-4 weeks, sometimes going out as far as a couple of months. Over time, I didn’t find that my returns were meaningfully above what I’d get from an S&P500 index fund. And as I began comparing the returns and capital intensity of rolling stocks vs. short premium options strategies, options won out handily and I stopped. Now, I may wheel stocks (sell covered calls or dump at a higher price, as technicals indicate) that get assigned to me off busted short puts, but I don’t actually buy stocks outright with the intention of rolling.

If you’re serious about pursuing this as a trading strategy, there are several sources that you might find useful in gaining more indepth knowledge of rolling stock strategies. Including books and online primers, have a look at the Investor's Business Daily site. I believe there is still a section there that deals with the strategy.

Good luck.

Thanks man

This is play money.

High 90-something-percent of my portfolio is in pretty safe stuff.