Forget Chinese Commodity Speculators, Meet North America’s "Moms-and-Millennials" Oil Day-Traders
By Tyler Durden
We showed you the “bored” Chinese workers who traded commodity futures for excitement – Now, it's time to meet North America's oil day-traders… moms-and millenials.
The recent volatility in crude oil has gotten the attention of people who do not list trading as their day job, but are randomly attempting to day trade oil anyway the WSJ reports.
Take for example Erika Cajic, a 45-year old full-time parent who took a shot at trading oil via UWTI.
When Erika Cajic woke before dawn one morning in early May and read that wildfires were breaking out in an oil-producing region of Alberta, she sat down on the family room couch with a cup of hot chocolate and her laptop and bought shares of an investment linked to crude.
The 45-year-old full-time parent of two in Mississauga, Ontario, like many investors, reasoned that the production outages would drive up the price of oil. By buying the VelocityShares 3x Long Crude Oil exchange-traded note, she tripled down on her hunch, as the product uses derivatives that aim to rise and fall at triple the daily change in oil.
Within about four days, she estimated she made about 500 Canadian dollars (US$384) on those trades after converting from U.S. dollars.
“The swings are gigantic lately,” she said of the product, known by its ticker UWTI, and the other energy products she has traded in recent months.
For Matt Krasnoff, an employee of LinkedIn, he just keeps his trades displayed on Yahoo Finance on his computer screen during the day and monitors his trades at work.
“I just thought, let’s throw a couple of hundred dollars in it…and try it out,” said Matt Krasnoff, 26, of New York, who bought shares of UWTI last year after hearing about it from a friend. “I just enjoy the risk and the thrill of the market in general.”
Mr. Krasnoff works at LinkedIn Corp. in New York and keeps a list of his investments displayed on Yahoo Finance on his computer screen during the day. He said he typically invests in technology companies that he is familiar with and reads articles about the industry and watches Twitter to stay up to date.
He ditched UWTI within a few months of trying it, after he lost money. “It was outside of the realm of what I knew…the last straw was realizing that I wasn’t informed enough,” he said.
Now, he says, he is going to stick to investing in what he knows, like tech.
CME estimates that crude oil has been its second most traded contract among retail investors this year after the S&P – such investors make up about 10% of the daily trading volume said Mark Omens, executive director of retail sales at CME.
Frederick Bailey, of Savannah, Georgia is inbetween jobs so he figured he would put some money into UWTI in January as crude broke $30 a barrel. Although at least Bailey had some dealings with ETF's in the past.
Frederick Bailey, 59, of Savannah, Ga., said he put …read more
Source: Forget Chinese Commodity Speculators, Meet North America’s "Moms-and-Millennials" Oil Day-Traders
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