Oil Stock Trading: This Is Going To End Poorly

Last month, the Wall Street Journal put out an article titled “The New Oil Traders: Moms and Millennials” that chronicled the daily experience for stay-at-home moms and people in the 18-35 age range that log into their account each day and make trades on the price of oil.

Assuming it can be done, the transaction and social costs are extremely high: These people are paying $20 per day, sometimes more, to make oil and oil stock trades. Assuming that they are entering and exiting their positions 5 times (e.g. ten fees for a round-trip transaction), then we are talking about a hobby that costs $5,200 per year.

To get the fee under $1,000 per year, and assuming $10 per trade, these people can only afford to make one trade per week. Which, considering they use E&P companies, oil itself, and the integrated oil stocks to make their trades, … Read the rest of this article!