On Wednesday investors were wondering if money was about to rotate of out commodities due to an impending new regulation.
Specifically the CFTC voted to crack down on traders and curb bets on a slew of commodities – most notably oil .
Although the details are somewhat complex, in a nutshell the new regulation will limit the number of futures contracts any trader can hold.
Considering it’s a regulation that Wall Street has strongly opposed, your knee-jerk reaction may be to expect a decline – but trading pro Dan Dicker of MercBloc says not so fast.
”This kind of thing won’t do much,” he says. “And it will probably be challenged so I suspect it will be a long-time until this rule gets implied into the marketplace. I’d forget about it for the near-term.”
In other words, Dicker thinks there’s almost no worry that it keeps even some money from flowing into commodities.
So much for your short trade - but we'd never leave you hanging. We asked Dicker for another idea and he suggested long RIG.
”They control about half of all deep water rigs out there,” Dicker says. “At $50 I think it’s under valued.”
Also he suggests putting Chevron on the radar. He’s looking for the company to make an acquisition in natural gas. If and when that happens, “It could move the needle,” he says. “The street loves to see M&A activity in the space.”
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Trader disclosure: On Oct 19, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Seymour is long AAPL; Seymour is long BAC; Seymour is long INTC; Seymour is long NOK; Adami Owns (AGU); Adami Owns (C); Adami Owns (GS); Adami Owns (INTC); Adami Owns (MSFT); Adami Owns (NUE); Adami Owns (BTU); Finerman owns AAPL; Finerman wons JPM; Finerman’s firm owns JPM leaps and puts; Finerman’s firm owns AAPL and short calls; Finerman’s firm owns IBM and short calls; Finerman’s firm owns YHOO and short calls; Najarian has AAPL call spreads; Najarian has GS call spreads; Najarian is long RVBD; Najarian is long Long CIGX; Najarian is long CME; Najarian is long CBOE
For Patty Edwards
Trutina Financial owns AMZN
Trutina Financial owns C
Trutina Financial owns GOOG
Trutina Financial owns MSFT
Trutina Financial owns QCOM
Trutina Financial owns KO
Trutina Financial owns TGT
Trutina Financial owns JWN
For Brian Stutland
Stutland owns GS corporate bonds
Stutland is long V and has short V calls
Stutland Equities is market maker holding options and underlying positions hedged in VIX, VXX, SPX, SPY
For Dennis Gartman
Gartman is short Euro vs. dollar
Gartman is short copper
For Sam Hamadeh
No disclosures
For Ken Heinz
No disclosures
For Jeremy Wien
Peak Investments has vix positions
For Brian Kelly
Shelter Harbor Capital owns MGD
Kelly is long TLT
Kelly is long GLD
Kelly is short EURO
For Steve Weiss
Weiss owns QCOM
Weiss owns NIHD
Weiss owns NS
Weiss owns EUO
Weiss owns HPQ
Weiss owns RIMM
Fir Jim Iurio
Iuorio is long AAPL
Iuorio is long MSFT
Iuorio has short puts RIG
For Josh Brown
Brown is long AAPL
For James Gorman
No disclosures
For Leon Cooperman
No disclosures
For Tristan Gerra
Robert W. Baird & Co. Incorporated makes a market in the securities of INTC.
Robert W. Baird & Co. Incorporated and/or its affiliates expect to receive or intend to seek investment banking related compensation from the company or companies mentioned in this report within the next three months.
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