Any short sale opportunities in trans-continental shipping (aside from UPS and FedEx)??
Answers
989 points
rvilmur answered 10 months ago …
Be careful here, even though shipping volumes are down, the drop in the cost of fuel to move the products has dropped dramatically. So don't be too sure that there are good shorts in the shipping industry.
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221 points
BryanPerry answered 10 months ago …
Well, I know one subset of transport stocks that you SHOULDN'T short. One of hottest sectors to trade is the dry-bulk shipping stocks. You can expect up to 30% moves in the names in this space.
Right now, the Baltic Dry Index (BDI) is holding on to a minor rally that gave the sector a big jump off of the October lows. Now the group has pulled back off the recent highs, where things get interesting.
The most widely-traded name in the dry bulk sector is DryShips (DRYS), where daily volume frequently tops 20 million shares. What's more, put and call options trade in the tens of thousands of contracts per day. It's a highly liquid name -- and one that traders can make a living off of by staying one step ahead of the extreme volatility this stock brings.
This is the kind of stock that can make those kinds of moves, especially when all the stimulus targeted toward infrastructure rejuvenates the shipping of raw materials around the world.
