An ETF to Plug Into Alternative Energy

On the flip side, if oil goes back to $40 and stays there (which I don't think is likely), I expect the fund would get crushed.

It is a small-cap product that favors growth. PowerShares breaks down the style as 86% growth and 14% value. As you might expect, there is no dividend.

On the basis of its option action, the fund is a hot potato. The implied volatility for an at-the-money call option for April is 73%, but an at-the-money call for the Energy Select Sector SPDR (XLE Quote) comes in at only 24%. The short and sweet of these numbers is that the market expects much more action out of the PowerShares fund.

One other quirk worth mentioning is that three of the fund's top 10 holdings have market caps under $400 million. It is possible that a massive inflow of new money into the fund could be the tail that wags the dog with regard to moving the market in some of the components. There could be a big lift on the way up, but also sharp action on the way down.

The idea of owning alternative energy is compelling, but it's not for the faint of heart.