If I Had Five Hundred Dollars

Hockey pools are gambling, right? Playing the stock market is gambling, right? Buying call options is gambling, right? Well maybe buying call options isn't really gambling, but you get the picture. I'm trying to think of ways to supercharge this hockey pool. Give it some nitro, if you know what I'm saying.

Everyone has heard of iShares? They are basically a series of exchange traded funds that lump TSX stocks from a certain sector into something like mutual funds. The difference is that an ETF trades just like stock on the TSX. The Montreal Exchange even offers derivatives on some of these ETFs.

These days, I've been watching the TSX Energy Index, XEG, a little bit.

Above is a 6 month candlestick chart of XEG, including a couple of technical analysis tools called the MACD and the Slow Stochastics. All the stars are aligned baby! We are hitting $90+ by December.

So I'll cut to the chase. I say we get Broker Bill to place us an order for six (6) ishares of XEG, commission free of course, for $465. Guaranteed, we'll by up by $90 by December, we'll sell (commission free of course) and the winner of Superdraft will be rich.

If that is too boring for you (I figured you'd think so) we could put this Superdraft trade on Turbo and blow past Toronto to Montreal, if you know what I'm saying. We could gamble our gamblings on the right to buy 100 ishares of XEG in March 2007 at a price of $82. This would cost only $465 (coincidentally). If the call option (XEXCI) premium goes up by $0.70 for every $1.00 the XEG runs, the $465 will turn into $1375 by the time the XEG hits $90 in December and we bail out of the trade. That's what I'm talkin' about! There's really no downside :)

I'll now hand it over to Broker Bill, so he can tell us all what a stupid idea this is. After all, I'm only three quarters serious!

p.s. - I'm hoping that Broker Bill to provide us with weekly updates and analysis on this Woulda Coulda Shoulda Superdraft paper trade.