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USO

THE WEEK AHEAD: MU EARNINGS; EWZ, GDX, USOAlthough both FDX and ORCL announce earnings tomorrow (Monday) after market close, the underlying with the implied volatility metrics I generally look for in a volatility contraction play are present in MU, which announces Thursday after market close. With a rank of 82 and a 30-day of 60%, the 70% probability of profit 39/52.5 20-delta short strangle is paying 1.66 at the mid-price. Since it's been beaten down a bit recently, I could see skewing that setup a bit to the bullish side, and or capping off call side risk via a Jade Lizard (the October 19th 39/49/50 would do the trick -- it's paying 1.13 at the mid with no upside risk above 37.87). As far as non-earnings are concerned, implied volatility is present where it's been for a bit -- in EWZ (rank 99/implied 55) (the Brazilian exchange-traded fund), PBR (88/72) (Brazilian petro), CRON (76/124) (cannabis), GDX (66/30) (gold miners), and USO (58/27) (oil). Naturally, there's also TSLA (69/54), but with earnings in 52, you might as well wait for the full-on, earnings related volatility expansion/contraction ... .
NASDAQ:MU
by NaughtyPines
4
WTI - Yearly Cycle Low - Still to Come?Oil Left translated on the last Daily Cycle but did not take out the previous cycle's low as expected. It also did not close above the 10 week MA after making a swing low last Friday. This leads me to believe we are seeing another Daily Cycle within this extended Intermediate Cycle, which should also left translate, and this time, move to a lower low, taking out the low seen on August 15th. This would then print an Intermediate Cycle Low, and likely a coinciding YCL. If we close the week in the 70's, I would be skeptical of the bearish sentiment then and have to think that the Intermediate Cycle bottom was printed on Aug 15 low; however, at this time, this is not my belief.
OANDA:WTICOUSDShort
by faronf
1
USO / CL - Bullish price action buy signal from key support**Market Structure** *Market has been making higher highs *Large rejection off of the key support zone of $67 - $66.40 *Intra-day pattern is a 2 bar reversal, daily is a bullish pinbar **Trading Ideas** *Go long at an upper break of the pattern for a less aggressive entry ($68) or enter long on a pullback for a more aggressive entry($67-$66.80) *IV rank in oil is still very high so either get long by selling puts to collect on both direction and premium, or simply get long via /CL or USO
NYMEX:CL1!Long
by krugman87
4
OIL / CL - Large bullish weekly candle - Get ready for blastoff!This video discussed the large bullish weekly pinbar setup that has formed in light crude. I discussed the current market structure, trading tips and trade ideas. Notes from the video are posted below. **Current Market Structure** -Long term bullish trend -Price has stayed within bullish channel -Large bullish weekly candle from pullback off of key support **Trading Tips** -Chances are higher now that price makes a string bullish run up to $75 and may even make a quick run to 80. -Keep in mind that oil is generally a volatile product and large out-sized moves are common. -This can be traded as pure directional using either futures, CFDs, or ETFs(with oil exposure), but due to the high IV I am looking to get both directional and short premium, which can be done by selling puts. -Either enter on a retracement around $69 (more risky) or a break above the weekly candle around $71.25(less risky) -Price targets are $75 and $80 **Trade Ideas** -Sold a put w/ $61.50 strike(15 delta, 30 DTE) when price was at $67 -Rolled that put up to $64 strike(17 delta, 27 DTE) when price was at $69 -Now that we have a price action signal I am considering rolling up to a 30 delta option($66) to get more directional -Keep in mind that September light crude is at 68.14, $2 below spot price
NYMEX:CL1!Long
by krugman87
28
OIL /CL USO - Short Premium - Short put into high IV for $$$The 1 year IVR in USO has reached 93%, and has reach 100% on the 90 day IVR. This is exactly when we want to begin selling premium. In this case I decided not to sell a straddle(selling both a put and a call), because I don't like the upside risk I would be taking on. With this trade, selling a put, we are both selling premium and getting directional. Technically I like this trade because price is reaching a key support of $66.30 where I think oil could find a floor and even pop a bit higher from here as bulls begin stepping in. The specific trade I took was the short put @ 61.50 w/ 30 DTE. It has a 15 delta (85% chance of full profitability), with a break even of $61. Oil would have to fall another 10% in the next 30 days just to hit break even, so I like the odds.
NYMEX:CL1!Long
by krugman87
1
OPENING: USO Put Diagonal AUG/OCT 14.5/17 PMCPUSO Bearish Put Diagonal or Poor Man's Covered Put After nearly 15% rise in the WTI price in recent weeks, I'm taking a small bearish bet on oil with reasonable odds over the next 46 days of a small pullback back 3% to under 14.50. Followed the trade idea shared by the fine work of Sir NaughtyPines (link below). Long the OCT 17 put strike at 77 delta and short the AUG 14.5 put strike at 35 delta. Paid a net debt of 1.90 which is 76% of the 2.50 width. TOS shows a 15.25 breakeven, max profit of 120 and 58% POP by Aug expiry. IVR 71% with IV 29% Profit target of + 20% the initial debt for +0.38 at 2.28. Sold two lots to make it worth my time.
AMEX:USOShort
by dime
THE WEEK AHEAD: USO, XOP, XLE DOWNWARD PUT DIAGONALSWhile I'm waiting for my August monthly premium selling plays to grind out, I'm pounding the pavement for potential directional plays to get in on. Late last week, I shorted TLT at the 122 horizontal resistance level I alerted last week via the inverse TBT, (See TBT Upward Call Diagonal Post Below), so I'm looking for fun in other places, one of which is in USO, XOP, or XLE (pick your poison). Granted, USO is pesky and hard to work with due to its size. Nevertheless, it's a good small underlying that small accounts can potentially work without it causing too much pain in the event things don't go your way. This week, I'm eyeing the resistance level at 16 for a long-dated bearish assumption setup. Naturally, you can do a risk one to make one, static one-off spread to play it (i.e., a short call vertical or a long put vertical wrapped around 16 if we hit that level), but I generally opt for setup flexibility in the event I feel I need more time for the play to work out and/or to reduce cost basis, and my go-to setup for that is a diagonal. Pictured here is an Oct/Jan 14/19 downward put diagonal, with the following metrics: Max Loss on Setup: $370/contract Max Profit on Setup: $130/contract Break Even on Setup: 15.30 vs. 15.06 spot Debit Paid/Spread Width Ratio: 74% Take Profit: 20% of debit paid or $74 Naturally, if USO gets to 16, some adjustment to the setup will be required, so this is just an example of the setup I would use (i.e., (1) setup break even at or above spot; (2) debit paid/spread width ratio of <75%). The other thing to note is that I'm not particularly fond of going out to October for the front month. Currently, however, no Sept expiry is available and the Aug 17th 14 short put strike is paying a paltry .20. Consequently, I can potentially see (a) just buying the ~90 delta long put back month if we hit 16 and then subsequently legging into the short put aspect on a meaningful drop; or (b) buying an Aug/Jan setup in spite of the paltry .20 received for the 14 short and then rolling the short out in time to bring in more credit if we get a drop in price such that the 14 strike brings in a significant credit (I generally opt for the latter; some cover is better than no cover at all, even if it is a lousy $20)). Natural alternatives would be a similar setup in XOP on a hit of overhead horizontal resistance at 44.50-45.00. There, however, I'd probably go with my standard "skip month" diagonal: preliminarily, the Aug/Oct 41/48 costs 4.84/contract to put on, has a nice 2.16 max profit on setup, a break even of 43.16 versus 43.06 spot, a debit paid/spread width ratio of 69.1%, and a 20% take profit of $97/contract. Similarly, XLE overhead resistance is between 79 and 80: preliminarily, the Aug/Dec (no October monthly available) 73/86 costs 9.86/contract to put on, has a max profit on setup of 3.14, a break even of 76.14 versus 75.94 spot, a debit paid/spread width ratio of 75.8%, and a 20% take profit of $198/contract. That 75.8% metric is a bit more than I'd like to pay, but the trade off is having more roll opportunities to reduce cost basis and improve my break even. OTHER PENDING ALERTS: IWM SHORT, DOWNWARD PUT DIAGONAL/POOR MAN'S COVERED PUT AT ~170 or QQQ SHORT, DOWNWARD PUT DIAGONAL/POOR MAN'S COVERED PUT AT ~177 (PRIMARILY TO ADD SHORT DELTA TO COVERED CALL PORTFOLIO). GLD BULLISH ASSUMPTION SETUP AT ~115 OR GDX BULLISH ASSUMPTION SETUP AT ~21.
AMEX:USOShort
by NaughtyPines
1