Crude Oil

misterkel said:
XOM just below the money puts at 2-3 months out. If you get assigned, the div will be >10%, so you can hold.
Can oil really down any more?
Also - I've been pairs trading USO short against USOI (covered calls on USO) long. Been a good trade so far.
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At these levels you mine as well buy the stock, i used to sell puts also and i am a big fan of this ,buy prices are so depressed why take the same risk and less reward??
 
Primal Trader said:
Although Natural Gas is often called "The Widow Maker," at times CL can be even more so, due to the extreme reaction to headlines and rumors. Especially now with the virus exacerbating risk asset swings in general.

The level of uncertainty in this oil market right now is amazing; thus the rewards could be astronomical, but if you are on the wrong side ... Ughh! At the moment I will only consider brief day trades.

If the recent "agreement" falls apart completely, the key price levels below 20 on WTI are the 2001 low of $17.15 a barrel and if it really crashes, the 1998 low of $10.35.
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options can mitigate that risk even if your on the wrong side, the bigger risk is if uncertainty looms longer and your constantly paying premium you end up losing just as much if not more, but a worth it bet since uncertainty doesn't last for ever and at least you take your losses if your on the wrong side one week at a time, assuming your buying weekly options
 
I read that at least one major brokerage platform, not sure who, raised initial margin for holding positions in CL to 200% of CME initial. Interesting development within the context of this conversation ...
 
The Fed's indiscriminant buying along with all these government interventions to artificially prop up markets in order to buy ailing and mismanaged industries more time, instead of just letting the weak and overleveraged naturally go bankrupt, is making it almost impossible to short anything.
 
Crude oil futures is trading at 24.16 as I type, up +1.39%. With all the buzz surrounding OPEC cut, you'd think it would be up 5% by now. What does this mean? There's no hurry is the prevailing thought among traders. Traders will wait and see how this pans out in other markets like S&P, since gasoline demand is down so much due to worldwide quarantine. Currently S&P futures is down -1.45%. Should S&P tumble tomorrow, you can bet crude oil will follow suit and tank as well.
 
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