The LFB

Trading Oil with Options

With the greatest respect Prof. Banks to your esteemed career that is very impressive, there is a huge void between the academic side of the market, and the traded side of the market. Those who can, trade. Those who do not, write. There are some who do both, and they tend to be the ones whose trading is simple, and writing is clear. Academics and trading do not mix, and as can be seen in the initial comment to the article, the academic view is sometimes held on a lofty perch. This ‘aint Grandpa’s market, as some would say.

Trading Oil with Options

Thanks Brandon, agreed. Trading options and futures is easy, planning the potential, limiting exposure, and capping expectancy is the hard part for most. So, we will stick to our 30 years of trade desk knowledge, that has stood us in good stead, and do the hard part; planning the trade. This is not a complicated market, the expectancy of those not educated in the arena they trade is what makes it complicated.

Paul Krugman + Al Gore = The Way Forward

I'll pose the same question again since it hasn't yet been answered.

Let's put the issues of global warming and who may or may not be a socialist aside for now.

How is it wrong to use the fiscal stimulus which nearly every economist believes we need to modernize our energy infrastructure, especially when the benefits will be more jobs, less pollution, a reduced current account deficit, less dependence on foreign oil and a better strategic position?

Paul Krugman + Al Gore = The Way Forward

Let's remove the argument regarding global warming for a minute and make this strictly an economic and strategic argument.

There's no question that our energy infrastructure needs to be made more efficient, and there's no question that it's strategically dangerous for the U.S. to continuously send billions to governments which are not our friends (run huge current account deficits).

There's also no question that the economy will require a major stimulus package going forward.

If we can improve our energy infrastructure while at the same time we improve our current account and strategic positions, how is that bad?

Where else would you want the stimulus to go to?

What alternatives do you propose that will accomplish all three objectives?