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USO

THE WEEK AHEAD: USO/XLE/XOP, EWW, XLUEXCHANGE-TRADED FUNDS ORDERED BY IMPLIED VOLATILITY RANK: USO 67/167 EWW 57/73 XLE 57/87 XLU 57/53 GLD 51/32 EWZ 50/85 XOP 49/105 SMH 47/58 GDXJ 44/86 XLF 41/53 FXI 32/39 GDX 31/66 TLT 30/25 BROAD MARKET EXCHANGE-TRADED FUNDS ORDERED BY IMPLIED VOLATILITY RANK: IWM 59/60 EEM 46/49 SPY 47/58 QQQ 46/44 EFA 39/45 FUTURES ORDERED BY IMPLIED VOLATILITY RANK: /NG 72/67 /CL 67/157 /GC 51/31 /ZS 51/19 /ES 47/56 /SI 41/51 /ZW 40/32 /ZC 29/27 VIX/VIX DERIVATIVES VIX finished the week at 46.80 with the entire /VX term structure in backwardation. MUSINGS: Shown here is an EWW short put in the May cycle paying 1.00. Camped out at the 23 delta strike, it has a break even of 22.00 and has a 4.54% return on capital in a cash secured environment. Alternatively, the May 15th 22/29 short strangle is paying 1.54 at the mid. * * * Long /CL at $20/barrel via out-the-money short puts or short put verticals may turn out to be the "trade of the year" after (in my case) being taken to the wood shed playing it non-directionally/rangebound between 52 and 63. Only time will tell; it's come up substantially off its lows already with it remaining to be seen whether OPEC+ can get its shit together and quit with the self-harm. * * * In the IRA, it looks to be touch and go for acquiring stuff on my shopping list. (See Posts, below). I've stuck my lines in the water; the best I can hope for is to get some bites at April opex. If I don't get assigned, I'll re-up with a rung to replace any expiring worthless if the market stays down here. Simultaneously, I'm looking to exit my TLT position, which has a cost basis of below $110/share, thinking that the capital can be better deployed elsewhere, but don't want to do that if I don't pick any other dividend-generating underlyings to replace it. Looked at from that perspective, my "personal" yield on the TLT position in light of my particular cost basis is 2.98/$110 or about 2.71%, which isn't horrible.
AMEX:EWW
by NaughtyPines
2
TRUMP, THE MAESTRO, RUNS UP THE STOCK MARKETTo gain an edge, this is what you need to know now. Trump The Maestro Trump, the maestro, successfully ran up the stock market over 500 Dow points by apparently giving the wrong information and media proudly touting it. Trump stated that Saudi and Russia had reached an agreement to cut oil production by 15 million barrels a day. This caused oil to spike up by over 30%. There is often a strong correlation between oil and stocks. As oil spiked, stocks followed. Russia says there is no such agreement. Saudi says that even 10 million barrel cut is an extreme exaggeration. The same media that was highly touting what Trump said is mostly silent on denials from Russia and Saudi Arabia. Those investors who do not have great sources have continued to buy oil and stocks based on media touting oblivious to the denials by Saudi and Russia. Smart Money And Momo Crowd The momo crowd has been aggressively buying stocks since yesterday morning and extremely aggressively bought stocks on Trump's statement touted by the media. Smart money has been selling stocks on up spikes and slamming momo hard.
O
by sickgains
Short Crude at $26 areaWith the corona virus situation going on, we know a few things for sure. 1. That is manufacturing has slow down globally = Low demand. 2. Russia Vs Opec on who can produce more oil = High Supply. these two things are a disaster in progress for Crude and it will continue to be unless this corona situation get under control. a lot of people are like, OMG CRUDE never been so low, and it won't stay this low. WRONG! IT has gone this low before in 2016, and it has loss more than 70% during the last economic crisis in 2008. Unless the coronavirus situation improves and all the lockdowns are lifted,I don't think oil has much chance of recovering yet. There could also be a lot of shale oil stock getting absorbed and bankrupt this year just like in 2016. If you guys see a weak shale oil company to short, feel free to comment. Short Entry $26 Short target $20 Stoploss $30
NYMEX:CL1!Short
by WallSt007
TRADE IDEA: USO OCTOBER 16TH 2 X 2/MAY 15TH 5 CALL RATIO SPREADPictured here is a bullish assumption diagonalized call ratio spread with two times the number of long calls at the 90 delta strike in October as the number of calls in the front month with a 4.45 break even versus 4.47 spot. As of Friday close, it's priced at a 4.89 debit and had delta/theta metrics of 134.84/.45. I generally visualize this setup in two, separate pieces -- one consisting of a long call diagonal and the other, a standalone long. Assuming price breaks the short call running into expiry (and stays there), the long call diagonal consisting of one long call and the front month short will converge on max profit. This will be the difference between the width of the spread (3.00) and what it cost to put on one long call leg and the short call (2.17) or .83 ($83), at or near which that aspect should be stripped off. The remaining call is then left to ride alone as synthetic stock to be taken off in profit, potentially targeting the $8-10/share, making a 5.25-7.25 profit on the standalone long conceivable. In the event price doesn't clear the short call toward expiry, the short call aspect is rolled out to reduce cost basis further.
AMEX:USOLong
by NaughtyPines
THE WEEK AHEAD: A PREMIUM RICH MARKETOPTIONS LIQUID EARNINGS ANNOUNCEMENTS: MU (77/112) NKE (74/103) EXCHANGE-TRADED FUNDS ORDERED BY IMPLIED VOLATILITY RANK: EWZ (91/132) USO (89/210) XLU (84/76) GDXJ (82/141) XLE (77/109) EWW (76/105) SMH (73/105) TLT (71/47) XOP (63/154) SLV (73/79) GLD (63/37) FXI (61/63) GDX (57/106) BROAD MARKET ORDERED BY IMPLIED VOLATILITY RANK: IWM (76/71) EEM (74/73) SPY (73/66) QQQ (73/60) EFA (54/53) VIX/VIX DERIVATIVES VIX: 66.04 /VX APRIL: 62.00 /VX MAY: 56.95 /VX JUNE: 49.95 MUSINGS: On Margin: As you can see by the chart showing the top five or so exchange-traded funds having the highest implied volatility ranks, this is largely a closely correlated sell-off. Because of this, I'm somewhat hesitant to pile into a bunch of nondirectional stuff simultaneously, if at all. If we get relief from the selling, these very same instruments could whip back to the call side in closely correlated fashion, leaving me with a bunch of tested call side; whereas now I'm just put side tested (and how). Naturally, this means I have to put up with being far more directional than I would ordinarily be, but these things happen and being patient and mechanical with how you manage current positions will be more productive in the long-term than going bonkers here and bailing out of everything in panic. Unfortunately, this likely means that I will be taking on far more shares of stock than I ordinarily like to hold on margin and then reducing cost basis over time via covered call. I'm always prepared for that, but being in stock on margin isn't buying power efficient, although you always have to plan somewhat for that possibility and go with the flow if taking on shares is really the best way to work yourself out of the trade. In The IRA: As pure luck would have it, leaving my SPY position monied throughout this nonsense (as well as erecting some additional call diagonals at market highs as delta cutters) has served me well. This wasn't particularly prescient or a stroke of genius; I was just doing what I felt I had to do to protect the largest element of my retirement portfolio at a point at which it made the most sense to do that and nothing else. Anyone else who did that and got lucky isn't a guru. No one saw this crap coming, and if they're saying they're a genius, well, I say you're free to call bullshit. Is this an opportunity to pick up things on your shopping list? Maybe. I've taken this opportunity to ladder some out-of-the-money short puts out in a few things that I've had on that list for ages -- XLU, IYR, EFA, and HYG; all dividend generators which have been just far too pricey to deploy the frustratingly large bit of dry powder I've had sitting on the sidelines for ages as the market inexplicably ground up to more and more ridiculous valuations. Will I get in at the best possible prices? The jury's out. I will be getting in far lower than at the market highs we saw just a few weeks ago (assuming price stays below the rungs of my ladders) and won't let anyone talk me out of the proposition that lower is always better in your retirement account even if I don't hit the lows perfectly. The basic strategy here, after all, isn't largely about share price; it's about assembling a portfolio that will pay out dividends regardless of growth and in which you can reduce cost basis over time via short call. It's three-legged: dividends, short call premium, and (if it happens) growth. If the grand arc of time has taught us anything, it's that growth may be an "average given" over the entire life of the market, but may not be over shorter time frames.
AMEX:EWZ
by NaughtyPines
5