I promised myself I wouldn’t be writing more e-mails on beautiful Saturday mornings.
Then, just within the last 24 hours, the oil market has gone ballistic — jumping wildly on Thursday afternoon … surging still more in overnight trading last night … and soaring virtually nonstop today.
It’s a Blow-Down-The-Doors, Screaming Rally!
Just since Thursday afternoon, crude oil is up nearly $4, and the Oil Service HOLDRS Trust (OIH), which Martin highlighted in yesterday’s Money and Markets, is up by over 1.5%.
But my picks in my Energy Options Alert put those gains to shame — they’re up 17%, 20% and 27.5% just in the last few hours.
Here’s why …
· The fundamentals driving oil and gas prices higher have not changed. To think that they can change in a mere 24 hours — or even 24 days for that matter — is downright foolish.
· Terrorism, unfortunately, is not going away. Witness last night’s rocket attack on two
· Supply disruptions are happening everywhere and cannot be avoided.
Now, here’s how to capitalize on the move …
Offshore Drilling Stock
Ready to Explode Higher
This morning, I didn’t wait.
I had told subscribers to keep their powder dry. Then, before the market sentiment suddenly turned overwhelmingly positive, and while prices were still near their lows, I recommended call options on an offshore drilling company.
The company provides contract drilling services to the industry worldwide. It owns over 40 rigs, nearly a dozen submersibles and three drilling ships.
Earnings are exploding higher, from a loss of 1 cent per share last year to a gain of 35 cents per share this year.
Sales are set to jump 36% through year-end 2005, with last quarter coming in with a 50% jump to $575 million.
If you bought 400 of this company’s shares, it would cost you about $17,000.
But with the options I recommended today, you can effectively control the same 400 shares for a mere $720, plus your broker’s commissions.
That’s almost 24-to-1 leverage.
You CAN lose the entire $720 plus commissions, but never a penny more. On the flip side, you get unlimited profit potential, but without the capital risk of holding the shares.
Already, this option is up today. If we get a dip in the market, there may be another chance to get into it Monday. If not, I’ll either look for an alternative option or wait for the next window.
Buying Oil for 11
Cents on The Dollar
In addition to the new reco I just put out, I also see many oil and gas companies that are likely targets for takeover, just like Unocal.
Reason: Their oil reserves are cheap.
· One of the companies I’m looking at has over 2.3 billion barrels of oil-equivalent reserves valued at a mere $6.57 a barrel, or just 11 cents on the dollar.
· The second company owns 2.1 billion barrels in oil and oil equivalent reserves — valued at a mere $8.57 per barrel, or just 14.3 cents on the dollar.
· The third company is an international oil explorer and producer, with 1.2 billion barrels of oil reserves. Their cost in terms of the company’s market value: Just 15 cents on the dollar.
The options on these companies are very attractive. The ones I have on my screen represent 400 shares in each company. If you were to buy the equivalent shares outright, it would cost you at least $78,000.
But with the options, you pay less than 5% of that amount. So four options, representing 400 shares, cost only about $3,660, plus your broker’s commissions.
That doesn’t mean you can’t lose money. You can. But let’s talk about the worst case. Let’s say I’m completely wrong on all three of these companies. They fall hard and don’t recover.
Even in that worst-case scenario, the most you can lose in these options is your investment of $3,660 (plus the commissions). Not a penny more.
But on the profit side, if I’m right and these shares become takeover candidates, I figure that $3,660 could be worth as much as $28,400, in as little as six months.
How to Turn Surging Oil Prices
Into A Feast Of Profits
The booming oil and energy market is a unique opportunity to apply maximum leverage.
If that meant investing on margin, borrowing money, or exposing you to unlimited risk, I would be dead set against it. But with the purchase of stock options, your risk is ALWAYS strictly limited to the amount you invest.
You can lose the entire amount you pay for an option, but never a penny more. Meanwhile your upside potential is virtually unlimited.
In unique situations — like the oil industry is in today — energy stock options are ideal; and it’s also the ideal time to launch a brand new service dedicated to trading them — Energy Options Alert.
When you join my Energy Options Alert …
First, you get the Energy Options Alert Trading Manual. The manual gives you the A-B-Cs on the various types of energy options and how they work. How they provide you with incredibly powerful leverage on the upside. How they limit your risk. How you can maximize profits … and much, much more.
Second, you get my special report — “TAKEOVER FRENZY” — which gives you all the ins and outs of how to identify a takeover candidate in the energy markets.
Third, whenever I see a hot opportunity with short-term leveraged profit potential and limited risk, I’ll rush you an email detailing exactly how you should trade it.
Naturally, because these markets move so fast, the initial recommendations you receive will depend on when you come onboard and what’s happening in the markets at that time.
Fourth, on each trading recommendation, I will tell you exactly what to buy, when to buy it, how much to buy, what to pay for it, and precisely what instructions to give your broker. Then, it’s up to you to pull the trigger, or not.
My goal: To make you money by making it easy for you to trade options.
Fifth, you’ll get follow-up instructions on when to roll over positions, take profits, add new positions, or get out of a position to cut a loss.
Two-For-One Charter Membership Offer!
Extended Due To Overwhelming Demand!
A couple of weeks ago, when we first offered 200 Charter Memberships to Energy Options Alert, we knew they’d go fast.
But not THIS fast! All of the first 200 Charter Memberships are now sold out.
So, due to the overwhelming demand, we’ve decided to extend the number of Charter Memberships to another 200 slots. This means less revenue for us, but more opportunity for you.
Join Energy Options Alert for one full year at the normal price of $5,000 … and take the second year free! That’s two full years for the price of one.
If you can’t afford the subscription fee without jeopardizing your liquidity, then this service isn’t for you. But if you have some speculative funds available, I believe the profit potential is many times the cost of the subscription.
And no guarantees, but with the oil market so hot, I believe you’ll be able to cover the entire subscription fee with the gains from your first trades.
Here’s what I CAN guarantee: If you wish to cancel at any time in the first year, for whatever reason, you will receive a full, pro-rated refund on the balance of your subscription.
A Heck of a Lot of Money
Is Being Made in The Energy Markets
The correction I talked about last week has come and gone.
Oil could be on its way to new record highs again, zooming up to the $75-per-barrel level … and then up to its inflation-adjusted record high of $91 per barrel.
So there’s no time to waste. If you would like me to get you into yesterday’s trade, I should be able to do so.
But you’ll have to call before 5pm Sunday. (Online, the deadline: 12 midnight).
Just pick up the phone, call Colleen at 877-719-3477. Or order online via our secure website.
Yours truly,
Larry Edelson
Editor, Energy Options Alert
About MONEY AND MARKETS
MONEY AND MARKETS (MAM) is published by Weiss Research, Inc. and written by Martin D. Weiss along with Larry Edelson, Tony Sagami and other contributors. To avoid conflicts of interest, Weiss Research and its staff do not hold positions in companies recommended in MAM. Nor do we accept any compensation for such recommendations. The comments, graphs, forecasts, and indices published in MAM are based upon data whose accuracy is deemed reliable but not guaranteed. Performance returns cited are derived from our best estimates but must be considered hypothetical inasmuch as we do not track the actual prices investors pay or receive. Contributors include Marie Albin, John Burke, Michael Burnick, Beth Cain, Amber Dakar, Scot Galvin, Michael Larson, Monica Lewman-Garcia, Julie Trudeau and others.
© 2005 by Weiss Research, Inc. All rights reserved.
15430 Endeavour Drive, Jupiter, FL 33478
