Thursday, December 11, 2008, 9:25 AM: For future analyses, I have started to keep track of diesel prices on Lake Michigan Drive and the daily close of the US Gasoline Fund ETF (ticker: UGA). For the former, I have been asked questions several times over the past year about diesel prices, and my responses have usually been "I don’t have a clue". I am starting to work on getting a clue, and what I have seen so far after two weeks of observation is that diesel prices don’t change from day to day like gas prices do.
About the ETF, from Yahoo: "The investment seeks to track, net of expenses, the changes in percentage terms of the [wholesale] price of gasoline." In two weeks, wholesale prices have gone from $1.13 to $1.00, and the ETF has gone from $22 to $19. So, if I think we are going to see $2 retail, I could buy UGA or UGA calls to put my money where my mouth is. If $1 retail is in the cards, then sell short UGA or buy UGA puts. Disclaimer: option and stock trading carries risks, you can lose all your investment, etc…