Investing in Aramco: Go long or short

making money investing in aramcoThe largest private company in the world is about to go public.  Aramco is the Saudi Arabian National Oil and Gas company.   It is the most profitable company in the world.  So it's going to have some kind of impact when it gets listed and the public can trade Aramco Stocks

Here are some quick facts about Aramco

  • Aramco has over 260 Billion Barrels of Oil in it's Reserves – Exxon in comparison has just 24 billion of oil reserves.
  • Aramco Saudi is the largest integrated oil and gas company in the world
  • In the first 9 months of this year, Aramco had net income of $68 billion.
  • Chinese state entities are in talks to pick up $5-10 billion worth of the IPO
  • Aramco plan to pay a dividend of $75 Billion in 2020!
  • This could be the largest IPO in history

Aramco Saudi is going to be listed on the Tadawul Saudi Stock Exchange on December 4.  There are plans in the works to potentially list on other markets around the world as well.

So should you invest in Aramco?

I can't give you advice on whether or not this is going to be a good investment.  I simply don't know.  I do know that the price is going to dominate financial news for some time.  The dividend is looking exciting but there are also a number of risks you need to take into account:

  • Climate Change – climate change caused by humans is science.  It's not going to go away.  And the world will need to divest from oil and other fossil fuels.  This could be a huge risk from Aramco.
  • We won't use Oil Forever – There is a reason why Saudi Arabia are selling their profit machine.  They want to reduce their exposure to oil.  But how long this transition is going to take?  No one knows – and their could be profits to be made in oil for quite some time.

I'll probably be sitting this one out.

Investing on Aramco on eToro

You can trade shares of Aramco on eToro (as CFDs).  This allows you to open both Long and Short positions.  Trading will be available when the stock is listed.  Most of us don't have exposure to the Saudi Stock Exchange, so being able to trade on eToro alongside stocks such as Apple and Google makes it easy.  So if you believe there is value in Aramco you can go long and buy shares.  Or if you feel like it's overvalued you can open a short position where you profit when the stock price drops.  If you don't know which way to call this trade, you might also consider copytrading where you copy the trades made by other traders.

You can find out more about Aramco on eToro here

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