The current energy and inflation crisis continues to put pressure on the entire commodity sector and especially energy ones such as Petroleum; but how can we invest in black gold to take advantage of the high volatility of the last period?
Societe Generale (SG) offers various solutions for positioning on oil futures through ETCs both from a speculative point of view and from an investment perspective.
Different combinations of investments
These products, whose range was updated in March of this year with new quotations on the segment ETFplus of Borsa Italiana, allow you to go up or down on Brent or WTI futures contracts. SG ETCs do not have an open-end maturity and offer investors different combinations of investments as they are available in versions without lever or with daily levers that reach up to three times up or down (+/- 3x).
ETC e future
As we said in this case, the exposure to oil takes place through ETCs based on oil futures contracts, innovative instruments that have the main advantage of replicate the performance of the underlying assetallowing at the same time investors to operate over different time horizons and without physically owning the asset in question.
It must be considered that the price of a single ETC is low when compared to the margin that is required to operate directly with futures contracts and this represents an advantage for those who do not have particularly large sums but who still want to diversify their investment portfolio. Furthermore, using ETCs it is not necessary to carry out the so-called “rollover”As the underlying expiring futures contracts are replaced by subsequent contracts by SG directly within the product.
More protection for the investor
Another key feature of these instruments is that SG ETCs are 105% collateralised instruments on a daily basis. This means that, for each ETC, the value of the assets pledged as collateral is rebalanced daily so as to be equal to 105% of the market value of the ETC, thus mitigating the counterparty risk.
Not just oil ETCs
As an example, the ETC with ISIN XS2425318768 it allows you to take an upward position on the Brent Future with a fixed leverage of 3 times, which makes it a particularly suitable instrument for intraday trading. Conversely, non-leveraged products such as ISIN XS2425316127 can be used to open larger oil positions.
Finally, we remind you that oil (both Brent and WTI) is traded in dollars, while SG ETCs are traded in euros and this makes these products also sensitive to fluctuations in the euro / dollar exchange rate. In this sense, it should be noted that within the range of SG ETCs there is a EUR Hedged (ISIN XS1526243529), a product built to offer protection against exchange rate risk, an interesting option for those who believe in an imminent devaluation of the dollar.