Refining Your Positions


Gasoline prices were a big factor in last month's higher-than-expected inflation reading.

Can you profit from the trend?

Karen Finerman is bullish on the pure play US refiners. On CNBC's Closing Bell she said that this trade is all about the crack spread, (which is the difference between the price refiners pay for crude and the price they get for their products such as gasoline and heating oil).

Gas prices appear to be going higher, she added, making the spread increase. In turn, that should make the refiners more profitable. The purest play US refiners are Tesoro (TSO), Valero (VLO), and Sunoco (SUN).

She also said, this is an inflation play. I believe inflation is real so as a trader right now, I like to own stocks that are exposed to inflation.

What’s your sense going into January?

I’m getting a little longer, she revealed, although I'm nervous about it.


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Trader disclosure: On Dec. 14, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Najarian owns (CSCO), (BIIB),Najarian owns (BSC) options, (TSO) Options, (TT) Options, (GOOG) Options, (YHOO) Options; Finerman's Firm Owns (GS), (VLO), (TSO), (WMT), (YHOO), (TWX),(INTC); Finerman's Firm Is Short (IWM), (IYR), (SPY), (IJR), (MBI); Finerman's Firm Is Short (LEH) And Owns (LEH) Puts; Finerman's Firm Is Short (MDY) And Owns (MDY) Puts; Finerman's Firm Owns (MSFT) Options; Finerman's Firm Owns S&P 500 Puts; Finerman's Firm Owns Russell 2000 Puts