Oil Services Industry ETF

A A A

DEFINITION

A sector exchange-traded fund (ETF) that invests in companies engaged in providing services such as drilling and seismic testing to the oil exploration & production (E&P) industry. Oil service companies generally do not produce oil and gas themselves, since their core competency lies in supplying services and associated products to energy producers.

INVESTOPEDIA EXPLAINS

The fortunes of an oil services ETF are closely tied to those of the overall energy industry, whose outlook in turn depends on prices of oil and natural gas. The performance of the oil services sector and related ETFs depends on the current stage of the economic cycle.


By owning an ETF, you get the diversification of an index fund as well as the ability to sell short, buy on margin and purchase as little as one share. Another advantage is that the expense ratios for most ETFs are lower than those of the average mutual fund. When buying and selling ETFs, you have to pay the same commission to your broker that you'd pay on any regular order




RELATED TERMS
  1. Integrated Oil & Gas Company

    A business entity that engages in the exploration, production, refinement and ...
  2. Oil Field

    A tract of land used for extracting petroleum, or crude oil, from the ground. ...
  3. Rig Utilization Rate

    A ratio used in the oil services industry that measures the amount of rigs being ...
  4. Exchange-Traded Fund - ETF

    A security that tracks an index, a commodity or a basket of assets like an index ...
  5. Barrels Per Day - B/D

    A measure of oil output, represented by the number of barrels of oil produced ...
  6. Factor Investing

    An investment strategy in which securities are chosen based on attributes that ...
  7. Reverse Gold ETF

    Exchange traded funds that are designed to trade in a direction that is diametrically ...
  8. Investment Fund

    A supply of capital belonging to numerous investors that is used to collectively ...
  9. Short Gold ETF

    An exchange traded fund that seeks to profit from negative changes in the price ...
  10. Shariah-Compliant Funds

    An investment fund which meets all of the requirements of Shariah law and the ...
Related Articles
  1. Spread Out Risk With Sector-Based ETFs ...
    Mutual Funds & ETFs

    Spread Out Risk With Sector-Based ETFs ...

  2. An Introduction To Sector ETFs
    Mutual Funds & ETFs

    An Introduction To Sector ETFs

  3. Understanding Oil Industry Terminology
    Budgeting

    Understanding Oil Industry Terminology

  4. ChartAdvisor for Aug. 29, 2014
    Chart Advisor

    ChartAdvisor for Aug. 29, 2014

  5. Invest In Large-Cap Value Stocks With ...
    Chart Advisor

    Invest In Large-Cap Value Stocks With ...

  6. Investing In Natural Gas? Eye ETFs, ...
    Investing News

    Investing In Natural Gas? Eye ETFs, ...

  7. Fracking ETFs Or Drilling Services Stocks?
    Investing News

    Fracking ETFs Or Drilling Services Stocks?

  8. 4 Currency ETFs To Watch Right Now
    Chart Advisor

    4 Currency ETFs To Watch Right Now

  9. How To Cash In On Credit Cards
    Mutual Funds & ETFs

    How To Cash In On Credit Cards

  10. Trading Opportunities Abound In The ...
    Chart Advisor

    Trading Opportunities Abound In The ...

comments powered by Disqus
Hot Definitions
  1. National Best Bid and Offer - NBBO

    A term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities.
  2. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
  3. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
  4. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
  5. Jeff Bezos

    Self-made billionaire Jeff Bezos is famous for founding online retail giant Amazon.com.
  6. Re-fracking

    Re-fracking is the practice of returning to older wells that had been fracked in the recent past to capitalize on newer, more effective extraction technology. Re-fracking can be effective on especially tight oil deposits – where the shale products low yields – to extend their productivity.
Trading Center