Oil prices look like gold looked a few months ago. Just as gold leaped past the $1000/oz mark, oil prices have bounded past the $100/barrel mark and well into the $120s.  Several analysts are touting $200/barrel prices and speculative action is obvious. One thing is for sure, when oil stops being the next market to be propelled to new highs from irrational exuberance, there will be a great shorting opportunity.

When you feel like we have reached this point, one option is to buy the ProShares UltraShort Oil & Gas fund (DUG). The fund tracks the Dow Jones U.S. Oil & Gas Index. But, through use of leveraged short positions, the fund seeks daily investment results that correspond to double the inverse (opposite) of the index’s daily performance. So if the Dow Jones U.S. Oil & Gas Index falls 1%, the fund should go up by 2%.

There are, of course, risks associated with trading ETFs.  But the ProShares Ultrashort Oil & Gas fund gives people who don’t want to worry about margin calls or contract expiration dates to short oil.