zerohedge.com/news/2015-01-07/first-shale-casualty-wbh-energy-files-bankruptcy-many-more-coming There's an image there with a list of companies that are at risk of going bust. It might be worth taking a punt at shorting them. The low oil prices are unsustainable for a large part of them so I think more of them will go belly up soon. Some need oil prices as high as 80 USD in able to break even.
I'd prefer to stay away from them in general, but you can probably come out on top by taking a short. I doubt all of the fracking companies are going to fold, but some of them will definitely find themselves in trouble with all of these low fuel prices. A rise in price would definitely help those companies.
Yeah, I avoid shorting because your potential loses are limitless, just use put options and your losses are limited to what you have spent. But even those are a hard play because you are a little late to the game, most of these stocks have been beaten up already and many are probably near their bottom. They could stay near their bottom for awhile, and your contracts expire.
You would have been better off buying put options on some of the more volatile drillers and servicers back during the summer / early fall. Once good or bad news on a particular company is made public, it's usually too late to capitalize on it. Such news usually hits outside of market hours. So if a company announces its filing Ch 11 tonight or early tomorrow morning, it will start trading in premarket at next to nothing, no matter what price it was the day before. The same goes for good news - if you didn't already own the stock ahead of the good news (almost always announced outside of market hours), it's usually too late to get much of anything out of it. That's generally when you sell the shares you already owned. Here's an interesting view on the whole oil situation: http://www.marketwatch.com/story/if...-a-global-recession-2015-01-22?dist=afterbell
Exactly, the old saying is ´ buy on the rumor, sell on the news´. By the time the news gets out, it is usually too late to make money on it. I would also warn against shorting some of these fracking companies. They are already beaten down a lot, and there is a good chance they could get bought. There is nothing that would suck worse than to be short a position and have Exxon mention possibly buying that company. Even rumors of an acquisition could totally wipe you out. If anything, play put options, that way your loses are limited to what you spent.
