I'll be concise here. The White House's recent 6-month ban on deep water drilling could send ripples throughout the industry, specifically for oil exploration firms that have a large amount of ultra-deep water drilling operations.
Due to their depth, ultra-deep water drilling exploration is the most risky, and could face some severe and and permanant restrictions down the road.
So which company is likely to be impacted the most by new regulations in deep and/or ultra-deep water drilling?
Even if no permanant restrictions are passed by Washington (and/or other governments) investors could very well act in anticipation of this, sending shares into a large (although most likely gradual) sell-off.
This is a possibility you should be on the look out for.
If you are aware of this possibility in advance, you will spot it early on and cal position yourself on the leading edge of the short trade rather than the lagging edge.
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