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CRUDEOIL1! trade ideas

LIGHT CRUDE OIL 1W COMODITIES - CRUDE is still DOWNLIGHT CRUDE OIL 1W COMODITIES - CRUDE is still DOWN It is difficult to understand the current context of raw materials in relation to their behaviour in previous times, and above all what is happening with oil. Until very recently, a conflict in the Middle East meant increases in the price per barrel. At the moment, the hornet's nest is stirred up, but it does not seem to be enough. The Israeli conflict with its close neighbours would have been more than enough for this scenario of increases, and even more so when a nuclear power like Iran is directly mentioned. However, the crude oil market is in a downward spiral that has not yet hit bottom. Whether it is due to the threat of electric cars, the use of renewable energies or any other reason that occurs to us why the oil market is currently bearish. Regardless of the factors that have brought the price to $70 per barrel, we can consider oil (black gold) as an alternative to gold or other reserve assets. If the technology market turns around, everyone will run around like headless chickens and this could be a good safe haven. As for the strategy to follow based on Technical Analysis, our position remains bearish until the price finds a support zone: SUPPORT 1: 57 - 61 SUPPORT 2: 34 - 39 As long as it does not break the bearish channel, we will follow the evolution of the price until it gives buy signals and we will pay special attention to the areas marked as supports. Once our strategy is defined, it is a matter of waiting to enter at the right time. TradeX Bot, you can configure BUY and SELL strategies on futures, so our way of approaching the market will offer us opportunities whether the market goes up or down. TradeX BoT (in development): Tool to automate trading strategies designed in TradingView. It works with both indicators and graphic design tools: parallel channels, trend lines, supports, resistances... It allows you to easily establish SL (%), TP (%), SL Trailing... multiple strategies in different values, simultaneous BUY-SELL orders, conditional orders. This tool is in the development process and the BETA will soon be ready for testing. FOLLOW ME and I will keep you informed of the progress we make. I share with you my technical analysis assessments on certain values ​​that I follow as part of the strategies I design for my portfolio, but I do not recommend anyone to operate based on these indications. Inform yourself, train yourself and build your own strategies when investing. I only hope that my comments help you on your own path :)
NYMEX:CL1!Short
by DeuXfi
#202440 - priceactiontds - weekly update - wti crude oil futuresGood Evening and I hope you are well. tl;dr wti crude oil: 50% pullback is around 68.20 and we are at 68.18. I favor the bulls that they printed a higher low major trend reversal here and 67 will hold. The pattern on the 1h looks like market is forming a round bottom which could lead to a big cup & handle pattern. If they get above 69 on Monday, I do expect 71.5 quickly after an likely a hit of the bear trend line around 72.5. Below 66.8 bears are favored for retest of 65. Quote from last week: comment: Low effort comment last week. Deal with it. Bulls have formed a small pullback bull trend from the 64 low and bears selling below 67 are still trapped. Bears have not gotten one daily bar below the prior bar during the past 8 days. No reason to expect this to change all of a sudden. comment: Bears finally came around last week and got a decent pullback to the 50% pullback from the recent bull leg. At 68.20 market is in total balance and I can’t be anything but neutral. I do think bulls are slightly favored and the 67 low could very well hold. Above 69 I favor the bulls, below 67 the bears. current market cycle: bear trend key levels: 64-74 bull case: Bulls want this to be a higher low major trend reversal and 67 to hold. If they manage that, they can print up to 73 to test the bear trend line starting mid July. As of now, we are at the 50% pb and the pattern does not give you any confirmation. You have to wait for it or trade in the probability with a potentially higher reward if you take the long here. Bulls need to stay above 67 though. Invalidation is below 67. bear case: Bears printed decent bear bars Wednesday & Thursday and it’s reasonable to expect more sideways movement because they want to retest 65 or lower. Same argument for the bears as for the bulls, we are at the 50% pb and there is no confirmation for either side. Below 67 bulls could have their stops and would wait for 64/65 before longing this again. Invalidation is above 69. outlook last week: short term: Bullish near the 4h 20ema until it stops working. Take profits at new highs unless bulls show even bigger strength. → Last Sunday we traded 71 and now we are at 68.18. 4h ema buy worked on Monday but then it stopped on Wednesday. Meh outlook. short term: Neutral. Bullish above 69 and bearish below 67. medium-long term - Update from 2024-09-22: Bears channel is the main pattern right now but bulls are trying to test the upper trend line. There we will see if the bear trend is has another leg down or we move sideways. There is an argument that the spike below 69 was a trap and we continue inside a range 69 - 75/77. current swing trade: None chart update: removed broken bull trend lines
NYMEX:MCL1!
by priceactiontds
Crude Oil upside Target 71.70Crude oil is presenting a promising buying opportunity as it approaches a crucial support level at $66. This level has demonstrated significant resilience, making it an ideal point for traders looking to enter the market. Our target for this trade is set at $71.70, which aligns with key resistance levels that could be tested as the market moves upward. In addition, our proprietary indicator has signaled a buying opportunity on the daily chart, further validating our bullish stance. The geopolitical tensions in the Middle East add another layer of urgency, as such instability often drives oil prices higher due to supply concerns. As we navigate through these market dynamics, now is an opportune time to consider adding crude oil to your portfolio. Keep an eye on price action around the $66 support, and be prepared for potential upward momentum towards our target of $71.70. Buying at Current Label Stoploss - 66 First Target 70 Second Target 71 Third Target 71.70
NYMEX:CL1!Long
by Sudhir-Sirohi
Light Crude Oil Futures: Mid East Tensions Fuel Price Surge!Light Crude Oil Futures (CL): NYMEX:CL1! As mentioned in our morning briefing, oil is currently extremely interesting, partly due to increasing tensions in the Middle East and the destruction of oil reserves there as well as in Russia. Consequently, oil prices have surged significantly. We are currently at a level of $85, but we still consider it quite likely that the Wave Y and the overarching Wave II have not yet concluded. We expect a three-part movement towards Y, with this Y anticipated to be in the range between 127.2% and 161.8% of a Wave C. This would place it between $63.2 and $57.4, nearly forming a double bottom with Wave ((b)) at $63.64. We would invalidate this scenario and consider a bullish outlook if we surpass the $90 mark in Crude Oil Futures. Should the price fall from here, we would then expect a five-wave structure downwards. However, caution is advised with oil due to the significant political and geopolitical influences on its price. The upcoming elections at the end of the year are particularly noteworthy, as a lower gasoline price in America is hugely important for electoral success, ensuring wins. With rising oil prices and the depletion of reserves, with hardly any reserves left in America, it will likely be necessary to purchase a large amount of oil. Considering the current economic stance of America, this task appears challenging. There is only one option if the goal is to lower oil prices for repurchasing. Even a $20 difference is substantial when buying as much oil as a country the size of America needs. Therefore, we still expect prices to fall further before we see a reversal.
NYMEX:CL1!Short
by freeguy_by_wmc
Crude Oil (CL1!): Waiting for the perfect entry after declineWe have continued to see crude oil prices fall lower and lower since we first analyzed it five months ago. The recent price decline is largely attributed to a worsening demand outlook. According to Commerzbank, the post-pandemic normalisation of demand growth in China has sharply deteriorated. Between April and July, oil demand was even lower than the previous year, and data released last weekend offers little hope for improvement in Chinese crude oil processing for August. Additionally, the International Energy Agency (IEA) has revised its forecast for global oil demand down to 900,000 barrels per day, with China accounting for just 20% of that growth. What was once a driver of demand is now seen as a drag on the market. The IEA projects that oil demand in China will rise by 260,000 barrels per day by 2025. With the continued struggles of global oil demand on one side and Middle East tensions on the other, it makes sense to set a limit order on crude oil as we closely watch how well NYMEX:CL1! respects the key levels on the chart. We're still targeting the $63.23-$57 range for a potential buy-in as we continue to monitor the market for an ideal entry point.
NYMEX:CL1!Long
by freeguy_by_wmc
4
Two weeks up, two days unwound: Bearish crude oil setupCrude oil is one of the few commodities that hasn’t participated in the broader rally this week, weighed down by a report on Thursday that Saudi Arabia will sacrifice higher prices to protect market share. Even before the report dropped there were signals crude was staring at downside, with a key reversal on Wednesday setting the tone. The gains crude took weeks to achieve have been unwound in two sessions, suggesting it’s far easier to sell rallies that buy dips in this environment. That view is reinforced by the uptrend break in RSI (14), a bearish signal on momentum that looks like it’s about to be confirmed by MACD. Thursday’s rout sent WTI through $67.65, a level that has acted as something of a pivot point for prices recently. Given its proximity, it creates a level to build bearish setups around. You could sell around these levels, but my preference would be to wait to see whether the price can take out Thursdays low of $67 first. You could then set a tight stop above $67.65 for protection. On the downside, $64.10 would be an obvious target. While the price and momentum signals are undeniably bearish, being close to quarter-end and with ample optimism out there about the global economy given China’s latest stimulus measures, I’m determined to let the near-term price action to tell me what to do. If it can’t break Thursdays lows, or reverses back above $67.65 and closes there, it would question the near-term bearish bias. Good luck! DS
NYMEX:CL1!Short
by FOREXcom
CRUDEOIL FORMING FALLING WEDGECrude Oil Update (4-Hour Timeframe) [ b]Bullish Indicators Identified: A breakout from a falling wedge pattern is anticipated. Price is expected to first take support from the current zone before a breakout occurs. Key Levels: Support: 5480 Resistance: 5830 Breakout Confirmation: Wait for price to hold at support before confirming the breakout towards higher levels. Risk Management: Always use stop-loss strategies to minimize risks in case of unexpected price movement. Disclaimer: This technical analysis is based on the provided data and should not be considered financial advice. Trading involves risk, and past performance is not indicative of future results. IF THIS WILL HELP YOU, PLEASE LIKE THE POST ❤️
MCX:CRUDEOIL1!Long
by Shalvisharma5
3
What’s Putting Crude Oil Prices Under Pressure?At a Glance With vehicle efficiency up and China's economy slowing, WTI crude oil prices experienced late summer lows, though they have since started to rebound Driving would need to increase by nearly 2% each year to keep fuel demand stable Crude oil prices fell sharply in late August and early September. Does this mean that oil is a bargain? The answer is complex. For starters, OPEC+ has taken 3.6 million barrels per day off of the market over the past two years. Secondly, geopolitical tensions remain high. What explains oil’s weakness despite these factors that ordinarily might have supported prices? Vehicle Efficiency The average car in model year 2024 will likely be able to drive as much as 24% further on the same amount of fuel as a similar car from model year 2012. Since a car typically lasts about 12 years, this means that each year drivers around the world need to drive about 2% further than the year before just to keep demand stable. In the U.S., drivers aren’t driving any further than they were back in 2019. Demand From China Last year, 35% of new cars sold in China were EVs, and this year that could grow to over 50%. China’s economy is also growing more slowly than in the past. Since 2005, oil prices have often peaked about one year after peaks in China’s pace of growth. China’s growth rate last crested in 2021, and oil prices peaked a year later in 2022. Moreover, China’s economy decelerated sharply over the summer which might deprive oil of a critical source of demand growth going into late 2024 and into next year. Finally, watch for OPEC+ decisions later this year, which could potentially boost output. If you have futures in your trading portfolio, you can check out CME Group data plans available on TradingView to suit your trading needs: tradingview.com/cme/ By Erik Norland, Executive Director and Senior Economist, CME Group *CME Group futures are not suitable for all investors and involve the risk of loss. Copyright © 2023 CME Group Inc. **All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
NYMEX:CL1!
by CME_Group
DOUBLE TOP PATTERN | CRUDEOIL - SEP 25Crude Oil (1 Hour Timeframe) Pattern: Double top spotted in crude oil. Bearish Indicators Identified: Crude oil is trading within a falling wedge pattern, hinting at potential for a bearish breakout. The price is testing key support zones while repeatedly rejecting at the resistance. Fundamental Outlook: Weaker-than-expected Chinese demand and Fed rate cut expectations are applying downward pressure on crude prices, although OPEC+ production cuts continue to provide support. Key Levels: Watching for movement below 6040 for confirmation of bearish trend continuation. Targets: 6000, 5900, 5850 Breakout Confirmation: A strong move below 6040 will confirm the breakout. Above 6200 could signal reversal. Risk Management: Set stop losses to manage risk. Disclaimer: This is a technical analysis and should not be considered financial advice. Trading involves risk, and past performance is not indicative of future results. IF THIS WILL HELP YOU, PLEASE LIKE THE POST ❤️
MCX:CRUDEOIL1!Short
by Shalvisharma5
WTI tests 71.50-72.50 resistance zoneOil traders mull over the demand outlook with China's outlook improving after a slew of stimulus, but the US outlook in question after weak consumer confidence data. EIA stockpiles are due later. Oil trades below its falling trendlines and its 200 SMA. The price has recovered from a September low of 65.50. However, the recovery has run into resistance at the 71.50-72.50 zone, which buyers will need to overcome to negate the near-term downtrend. A rise above this resistance zone opens the door to 75.00, the falling trendline resistance, and 77.25, the 200 SMA. Failure to rise above 71.50-72.50 could see the price ease back towards 70.00 before bringing 65.50 into focus.
NYMEX:CL1!
by FOREXcom
Lesson 5: Patience – The Key to Long-Term Trading SuccessWelcome to Lesson 5 of the Hercules Trading Psychology Course—Patience: The Key to Long-Term Trading Success. Building upon the foundational traits of Initiative and Discipline covered in previous lessons, today we delve into the essential virtue of Patience. Whether you’re trading stocks, commodities, cryptocurrencies, or any other financial instruments, patience is a crucial element that can significantly influence your trading outcomes. Why is Patience Essential in Trading? Patience is more than just waiting; it’s about making informed decisions and allowing your strategies the necessary time to unfold. In the fast-paced world of trading, it’s easy to feel the urge to act immediately, but this impulsiveness can often lead to mistakes and missed opportunities. Self-Inflicted vs. External Impatience A lot of our impatience is self-inflicted, stemming from our own desires for quick profits and immediate gratification. However, some impatience arises from external factors beyond our control, such as sudden market fluctuations or unforeseen economic events. Understanding the sources of impatience is the first step toward managing it effectively. Avoiding Financial Scams Impatience can make traders vulnerable to financial scams that promise quick returns. Scammers often prey on individuals who are desperate and impatient, offering schemes that sound too good to be true but ultimately lead to significant losses. Recognizing these scams and maintaining patience can protect you from falling victim to deceitful practices. The Long Game vs. Rushing Playing the long game in trading is far more beneficial than rushing into quick trades. Patience allows you to wait for optimal trading opportunities, align your strategies with market conditions, and build a sustainable trading career. Without patience, even the best strategies can falter under the pressure of immediate results. Realistic Trading Plans For those who aren’t starting with substantial capital, patience is key to building a realistic plan for making a living through trading. Setting achievable goals, managing expectations, and avoiding the allure of “get-rich-quick” schemes are essential for long-term success and financial stability. Key Concepts in Trading Successful trading isn’t just about technical analysis or spotting trends; it’s equally about mastering the psychological aspects of trading. Two critical components are money management and trading psychology. Money Management Effective money management involves controlling your risk, setting appropriate trade sizes, and ensuring that no single trade can significantly impact your overall portfolio. It’s about protecting your capital and making informed decisions that align with your financial goals. Trading Psychology Understanding the psychological side of trading—such as initiative and discipline—is where the real magic happens. Many traders struggle with maintaining initiative, which can hinder their trading performance. Additionally, discipline helps traders stick to their strategies and avoid impulsive decisions based on emotions. The Marshmallow Test and Trading Patience The Marshmallow Test, conducted in the 1960s and 1970s at Stanford University, examined how patient children could be. Participants were given the choice between eating a marshmallow immediately or waiting for a short period to receive a second marshmallow. The results revealed that those who exercised patience tended to have better life outcomes, including higher academic achievement and better emotional control. Fast forward to today, and our culture’s emphasis on instant gratification can make it challenging to cultivate patience, especially in trading. The markets don’t cater to our need for immediate satisfaction, and many trading promotions set unrealistic expectations for quick wins. Patience helps traders resist these temptations and focus on long-term success. Forex Education and Leverage While this lesson focuses on all financial markets, it’s worth noting that trading education often emphasizes the use of leverage—a tool that can amplify both profits and losses. Leverage is enticing because it allows traders to control larger positions with a smaller amount of capital. However, without proper understanding and disciplined risk management, leverage can lead to significant losses. Many educational programs and trading platforms showcase flashy tools and promising high returns, which can mislead inexperienced traders into thinking that success is easy. True mastery of trading involves understanding the nuanced nature of market movements and the importance of disciplined strategies over flashy indicators. The Realities of Trading Many individuals enter trading with the misconception that it’s a quick path to financial freedom or a way to eliminate debt. However, the reality is that patience is crucial. Beginners may experience early successes that lead to overconfidence and excessive risk-taking, resulting in substantial losses that shake their confidence. In their rush to recover losses, some traders fall for scams that promise miraculous returns but deliver nothing. This cycle of chasing losses can lead to a pattern of deceit and continual loss, highlighting the importance of patience and disciplined trading. How Scammers Exploit Trading Desperation When traders are desperate and lack knowledge, they become easy targets for scammers. These fraudsters exploit the trader’s impatience and desire for quick profits by offering schemes that seem promising but are fundamentally flawed. One such scam is the dual line scam, which has roots in sports betting but has infiltrated trading markets as well. Scammers make outrageous claims about turning small investments into massive returns, enticing traders with the allure of easy money. They often charge hefty fees for these bogus opportunities, leaving traders financially devastated while the scammers reap the rewards. The Price of Deceitful Trading Consider the example of a trader named Marco, who manipulates the system to profit deceitfully. Marco convinces multiple individuals to bet on opposite outcomes, ensuring that he profits regardless of the market’s direction. Such tactics not only lead to significant losses for unsuspecting traders but also erode trust within the trading community. Why People Fall for Get-Rich-Quick Schemes Individuals like David, Holly, and Sergio are drawn to charismatic figures like Marco because they believe in the promise of effortless success. Despite experiencing losses, the initial taste of profit keeps them hooked, reinforcing unrealistic expectations. This highlights a fundamental flaw in chasing quick profits without understanding the underlying complexities of trading. Why Patience is Key to Achieving Success True trading success requires embracing the long game and committing to continuous self-improvement. Quick money may seem appealing, but it often leads to traps that undermine your trading career. Patience allows you to set realistic goals, persevere through challenges, and build a solid foundation for long-term profitability. Most traders struggle because they don’t maintain their goals long enough, leading to high failure rates despite significant effort. Perseverance and patience are essential to navigating the ups and downs of trading and achieving lasting success. How Can You Succeed in Trading? Success in trading doesn’t necessarily require starting with a large capital. While a substantial investment can provide more opportunities, there are pathways for those with limited funds: Trading on Behalf of Others: Demonstrating consistent wins through demo trading can allow you to manage funds for others, building your reputation and capital over time. Attracting Investors: Wealthy individuals often seek skilled traders to help them earn more than traditional bank interest rates. Showcasing your trading abilities can open doors to lucrative opportunities. Proprietary Trading Firms: These firms provide the capital you need to trade, but they require proven results and may involve upfront costs for training and desk fees. Key Strategies for Successful Trading To excel in trading, it’s essential to implement effective strategies: Find a Reliable Trading System: Look for systems with a solid track record, ideally with results spanning at least a year. Test your system on a demo account or with real money, starting with a manageable investment. Document Your Results: Market your documented trading results online to attract opportunities. Consistent documentation helps in building credibility and attracting potential investors. Engage with Trading Communities: Participate in forums, webinars, and trading groups to share experiences and gain insights. Networking with other traders can provide support and new strategies. Continuous Learning: Stay updated with market trends, new trading tools, and advanced strategies. Invest in your education to refine your skills and adapt to changing market conditions. Why Play the Long Game in Trading? Patience and a long-term perspective are crucial for overcoming obstacles and achieving trading goals. Trading is a journey filled with challenges, and maintaining a realistic timeline helps you stay proactive and committed. By embracing the long game, you recognize that success doesn’t happen overnight. Instead, it results from consistent effort, disciplined strategies, and the ability to navigate through both profitable and challenging times. Subscribing to a disciplined and patient approach ensures sustainable success and minimizes the risks associated with impulsive trading decisions. Conclusion: Embrace Patience to Transform Your Trading Journey Patience is more than just waiting; it’s about making informed decisions and allowing your strategies the necessary time to unfold. By embracing patience, you empower yourself to navigate the complexities of all financial markets with confidence and determination. In Lesson 5, we’ve explored why patience is essential, how impatience can lead to financial scams, and the importance of playing the long game in trading. These elements are vital for building a strong foundation and achieving consistent profitability across all financial markets, whether you’re a swing trader or a day trader. Action Steps: Reflect on Your Patience: Assess how patient you are in your current trading approach. Identify areas where impatience may be affecting your decisions and commit to cultivating greater patience. Develop a Comprehensive Trading Plan: Create a detailed trading plan that outlines your strategies, risk management techniques, and criteria for entering and exiting trades. Ensure that this plan emphasizes patience and long-term success. Implement Robust Risk Management: Protect your capital by setting appropriate stop-loss orders, limiting trade sizes, and diversifying your portfolio across different financial instruments. Maintain a Trading Journal: Document every trade to gain insights into your trading behavior and identify patterns that need improvement. Reflect on your trades to reinforce patience and discipline. Practice Emotional Control Techniques: Incorporate mindfulness practices, meditation, or journaling into your daily routine to manage stress and maintain emotional equilibrium. Engage with the Trading Community: Join forums, attend webinars, or participate in trading groups to share experiences and gain support from fellow patient traders. Trust in Your System: Have confidence in your trading system. Understand that success takes time and that patience is a critical component of achieving long-term profitability. By implementing these strategies and focusing on unique, relevant keywords for each lesson, you can effectively optimize your Hercules Trading Psychology Course for search engines while providing valuable and engaging content to your learners. This balanced approach ensures that your course ranks well without falling into the pitfalls of keyword cannibalization, ultimately attracting a broader and more targeted audience. Ready to take the next step? Continue your journey by enrolling in Lesson 6: Emotional Control in Trading, where you’ll learn techniques to manage your emotions, build emotional resilience, and maintain a balanced mindset, ensuring consistent trading success across all financial markets.
NYMEX:CL1!Education
by exlux
Options Blueprint Series [Intermediate]: US Election Oil Play1. Introduction The 2024 US Presidential Election could have a significant impact on global markets, especially energy sectors like crude oil. With key policies and geopolitical tensions hinging on the outcome, many traders are eyeing a potential price surge in WTI Crude Oil futures. Our prior article (linked below) presented a potential opportunity for crude oil prices to rise by over 40% within a year following the election. This could bring WTI Crude Oil Futures (CLZ2025) from its current price of 67.80 to around 94.92. To capitalize on this potential opportunity, a strategic options play can be used to leverage this potential move, providing not only a chance to profit from a bullish breakout but also some protection against downside risk. This article explores a Breakout Booster Play using options on the December 2025 WTI Crude Oil futures contract (CLZ2025), designed to benefit from a possible post-election oil price surge. 2. Technical Overview In analyzing the December 2025 WTI Crude Oil Futures (CLZ2025), a strong support level is identified. The 61.8% Fibonacci retracement level aligns perfectly with a UFO support zone at 55.62, suggesting a significant area where buying interest could emerge if prices fall to this level. The current price of CLZ2025 is 67.80, and the technical analysis points to the possibility of a substantial bullish move following the 2024 US Presidential Election. The projected price increase of 40% could push crude oil prices up to 94.92 over the next year. However, even a more conservative target of 20% (around 81.36) could offer considerable upside potential. This analysis provides the foundation for constructing an options strategy that not only takes advantage of the potential upside but also offers a buffer zone against downside risk by capitalizing on key support levels. 3. The Options Strategy The options strategy we'll use here is a Breakout Booster Play designed to take advantage of the expected rise in crude oil prices. Here's how the strategy is constructed: 1. Sell 2 Puts at the 55 Strike: Expiring on November 17, 2025, these puts are sold to collect a premium of approximately 3.27 points per contract. By selling 2 puts, we collect a total of 6.54 points. This creates a buffer zone, allowing us to take on some downside risk while still profiting if prices remain above 55. 2. Buy 1 Call at the 71 Strike: Also expiring on November 17, 2025, the call is purchased for 6.28 points. This call gives us the potential for unlimited upside if crude oil prices rise above 71. Net Cost: The net cost of this strategy is minimal, with the collected premium from the puts (6.54) offsetting most of the cost of the call (6.28). The result is a credit of 0.26 points, meaning the trader gets paid to enter this position. Break-Even Points: The position would lose money only if crude oil falls below 54.87 (factoring in the premium collected). Profit potential becomes significant if crude oil rises above 71, with large gains expected if the projected move to 81.36 or 94.92 materializes. This strategy effectively positions the trader to profit from an upward breakout while maintaining a buffer against downside risk. If crude oil drops, losses are limited unless it falls below 54.87, at which point the trader would be required to take delivery of 2 crude oil futures contracts (long). 4. Profit and Risk Analysis Profit Potential: The key advantage of this options strategy is its profit potential on the upside. If crude oil prices rise above 71, the purchased call will start gaining value significantly. If crude oil reaches 94.92 (a 40% increase from the current price), the long call will be deep in the money, resulting in substantial profits. Even if the price rises more conservatively to 81.36 (a 20% increase), the strategy still allows for meaningful gains as the call appreciates. Since the net entry cost is essentially zero (with a small credit of 0.26 points), the potential profit is high, and it becomes especially powerful above 71, with unlimited upside. Risk Management: This strategy comes with a 19% buffer before any losses occur at expiration, as the break-even point is 54.87. However, it is important to note that if the trade is closed before expiration, losses could be realized if crude oil prices have dropped, even if the price is above 55. Risk Pre-Expiration: If crude oil prices fall sharply, especially before expiration, the trader could face significant losses. The risk is theoretically unlimited because, as the market moves against the sold puts, their value could rise dramatically. If a trader needs to close the position early, those puts could be worth significantly more than the premium initially collected, resulting in losses. Potential Margin Calls: If crude oil drops far enough, the trader may receive a margin call on the short puts. This could happen well before the price reaches 54.87, depending on the speed and size of the drop. If not managed properly, this could force the trader to close the position at a significant loss. While there is a built-in buffer, this trade requires active monitoring, particularly if crude oil prices start to decline. Risk management techniques, such as stop-loss orders, rolling options, or hedging, should be considered to mitigate losses in case the market moves unexpectedly. 5. Contract Specs and Margins WTI Crude Oil Futures (CL) Tick Size: The minimum price fluctuation is 0.01 per barrel. Tick Value: Each 0.01 movement equals $10 per contract. Margin Requirement: Approximately $6,100 per contract (subject to change based on market volatility). Micro Crude Oil Futures (MCL) Tick Value: Each 0.01 movement equals $1 per contract. Margin Requirement: Approximately $610 per contract, offering a lower capital requirement for smaller positions. Why Mention Both? Traders with larger capital allocations may prefer using standard WTI Crude Oil futures contracts, given their greater exposure and tick value. However, for smaller or more conservative traders, Micro Crude Oil Futures (MCL) provide a more accessible way to enter the market while maintaining the same exposure ratios in a smaller size. 6. Summary and Conclusion This options strategy provides a powerful way to capitalize on a potential post-election rally in crude oil prices, while offering downside protection. The combination of selling 2 puts at the 55 strike and buying 1 call at the 71 strike, all expiring on November 17, 2025, creates a structured approach to profit from a bullish breakout. With current analysis based on machine learning suggesting a potential 40% increase in crude oil prices over the next year, the long call offers unlimited profit potential above 71. At the same time, the sale of the puts at the 55 strike gives the strategy a 19% buffer, with the break-even point at expiration being 54.87. When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com - This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies. General Disclaimer: The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
NYMEX:CLZ2025Education
by traddictiv