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Gasoline Futures, Anyone?
Old 11-23-2008, 12:49 PM   #1
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Gasoline Futures, Anyone?

I'm guessing that gasoline prices won't get much lower than they are now. Two years from now I expect they'll be higher, and five years from now it's a virtual certainty.
Airlines hedge their fuel costs, is there a cheap and easy way at Vanguard for me to hedge something like 1,000 gallons per year starting in 2010 for five-ten years? It would also be nice to not pay taxes on the "gains".
If we can't hedge gasoline directly, is there some way to approximate the results? Commodity funds would trend with gas but I don't think they will zoom upward the way gas will.
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Old 11-23-2008, 02:07 PM   #2
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Originally Posted by Gearhead Jim View Post
I'm guessing that gasoline prices won't get much lower than they are now. Two years from now I expect they'll be higher, and five years from now it's a virtual certainty.
Airlines hedge their fuel costs, is there a cheap and easy way at Vanguard for me to hedge something like 1,000 gallons per year starting in 2010 for five-ten years? It would also be nice to not pay taxes on the "gains".
If we can't hedge gasoline directly, is there some way to approximate the results? Commodity funds would trend with gas but I don't think they will zoom upward the way gas will.
You can buy a futures contract. NYM, each contract is for 42,000 gallons. Mini contracts may trade somewhere, don't know.

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Old 11-23-2008, 02:36 PM   #3
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There is a gasoline ETF: UGA. Sounds like they are buying the front-month contract so you are betting that the spot price will rise over time.

"The investment seeks to track, net of expenses, the changes in percentage terms of the price of gasoline. The trust will invest in the futures contract on unleaded gasoline delivered to the New York harbor traded on the New York Mercantile Exchange that is the near month contract to expire."
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Old 11-23-2008, 02:44 PM   #4
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What's next... toilet paper ETFs.
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Old 11-23-2008, 02:48 PM   #5
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What's next... toilet paper ETFs.
Sounds to me like the perfect way to get wiped out.
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Old 11-23-2008, 08:18 PM   #6
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What's next... toilet paper ETFs.
Well, I was going to make a comment about reducing my consumption and perhaps avoiding buying any of it any ever again, when this turned into a completely different sort of gas thread...
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