USO trade ideas
USO Rising WedgePlenty of gains to come out of USO yet. I'll start to become more bearish towards the end of September, otherwise consider me an oil bull for right now. On a side note, I did pick up calls at beginning of the day yesterday too for some nice gains. Good luck everyone!
Notice: Not financial advice.
USO mid-term outlookthe 3 month chart is starting to look like a cup and handle formation. Indicating we could see a huge spike for Crude Oil in the next 6-9 months.
USO to drop to previous support levelSince the dollar is likely to pump over the next week or so, USO will inversely follow. There hasn't been much oil news recently and USO has reacted far more strongly to DXY than anything else I've seen. Where oil goes after this move is dependent on the news of the time. Additionally, Trump is pretty determined to keep WTI below 70/bbl, and every time I have inversed trump I have gotten wrecked.
USO - OilDecent IV here in Oil and I got rid of my XOP play, so I'm adding more oil exposure.
Sold -3 Sep21 14/15 strangles at $.65 cr, $1.95 cr overall.
Risk: 2x cr received
Profit: 50% cr received
USO is about to make a measured move downtrading range in descendig triangle, which is downward orientated. Measured move is long as triangle is long at the begining.
TF T&I XVIII Chart XI Rising Wedge ETFAn example of a Rising Wedge Pattern on a ETF, in this case the United States Oil Fund.
USO, Continued momentum for Crude OilOil with an interesting start to the week. bouncing of a key support and looks poised to continue upwards to 15.5 region with no forseeable issues. RSI also relatively low on weekly and daily timeframes
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.
USO setting up for a short or putTechnical show USO is moving lower. My plan is to short at current value with a Target 1 at 13.65.
I am using puts as follows. USO 17 Aug Put. My strike was at .15 per put.
Price is already up 20% on the day.
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 $198/contract. That 75.8% metric is a bit more than I'd like to pay, but the trade off is having more roll opportunities to reduce cost basis and improve my break even.
OTHER PENDING ALERTS:
IWM SHORT, DOWNWARD PUT DIAGONAL/POOR MAN'S COVERED PUT AT ~170 or QQQ SHORT, DOWNWARD PUT DIAGONAL/POOR MAN'S COVERED PUT AT ~177 (PRIMARILY TO ADD SHORT DELTA TO COVERED CALL PORTFOLIO).
GLD BULLISH ASSUMPTION SETUP AT ~115 OR GDX BULLISH ASSUMPTION SETUP AT ~21.
OilOil price up today (70.64)
USO (14.27) maybe a buy these next few days? If Cup pattern is correct..
Entry at 14.84
USO plaing with support lineBefore the trade
there will be a bouce st that level and price will go up to the 15 level
because the price is in the support lever
After the trade
You recongnize teh resistance levele and act accordingly
Trying and trying maybe you should play wiht stop limit orders
USO @ critical junctureUSO, retested uptrend line and failed big on Friday. Now, it is at its recent bottom around 13. If it does not hold here, there is a chance for a gap fill. USO has not rebounded well since the increased production announcement from Middle East and Russia. Some of the energy names are falling. SLB for example has a huge head and shoulders. It is a pattern to watch. Recent head and shoulders has not worked that well in the market.
USO oil fund shortBreak and backtest from underside of long term uptrend suggests possible fall away lower now in a wave iii/c for at least 10% lower
Gaps to catch on the downsideUSO fund left some gap on the way up from 9$ levels... need to fill those .... Selling advised fr downside tgts...
USO finding support soon?uso breaking through its first bullish trendline, next support zone could be around 12.5 - 12.75.
Decision Time for USOWe are at the bottom of the channel, looking for some bounce here. Also having consecutive new highs while in the channel, further signaling the trend continuation.
