The recent price of oil is a supply effect, not a demand one.Oil is definitely coming back up. The hippie/yuppie electric car party doesn't and won't have mass appeal. My friends love their Yukons and Suburbans and find Teslas "cute".
You're making money and have done so with OTM. So obvi you know how the game's played. Stick to it and soon you can buy yourself a 100k acre ranch in big sky country
LEAPS/major oil stocks
- Thread starter Stadtmuller Von Texas
- Start date
What country would that be?Stick to it and soon you can buy yourself a 100k acre ranch in big sky country
I have been thinking about your post for sometime and I actually think your strategy has merit. The only problem for me is finding the right opportunities to enter into such a trade and finding the right underlying (how to predict trend and high/low?). Also I find it difficult to just sit on my money either in cash wait for a "fat pitch" or tie up in long term options waiting for events to unfold slowly.
Regards,
I have been thinking about your post for sometime and I actually think your strategy has merit. The only problem for me is finding the right opportunities to enter into such a trade and finding the right underlying (how to predict trend and high/low?). Also I find it difficult to just sit on my money either in cash wait for a "fat pitch" or tie up in long term options waiting for events to unfold slowly.
Regards,
I like what Von Texas is doing but I have concerns. Problem with Options is that you lose theta everyday. So even if you buy options on oil and it takes a few weeks, or months, to produce a decent profit on the premium, you've lost quite a bit on time decay and need a big enough move to turn a profit.
As I've said before if I had major capital for trading I would stick to vanilla equities. No need to worry about the Greeks especially theta. I don't like the unlimited risk potential on Futures so Options is where I am for leverage.
I am mostly in cash except for 2018 long calls, hoping for a pullback soon as I would like to buy a large block of BP or RDS/A, before X-day , sell August 19 covered call at about $2.00 OTM, if I don't get called away I will hold thru X-day and collect the dividend, if my stock gets called away after X-day then I will collect 3 times. Premium , Dividend, & about $2.00 x shares held. These 2 stocks are already pulling back , but not enough yet. I pretty much do the same thing over & over with about 6 or so stocks. A good site for keeping up with oil & gas is ( OILPRICE.COM) their info is updated hourly.
Good Luck, Stadtmuller Von Texas
Good Luck, Stadtmuller Von Texas
I now prefer the longer DITM LEAPS with a Delta above 90 that way Theta is not much of a factor. OTM leaps have worked well for me also but I bought most of them in Jan, Feb. March of this year and that was a unique time period that does not come around to often. COBE will be posting 2019 leaps starting Sept. 12, 2016, I am not buying any more 2017 oil leaps as I think the oil stocks will be mostly flat for a few months & then increase sharply.
Good Luck Stadtmuller Von Texas
Hi Ironchef, you are absoulately right about trend/direction,I think oil will go up more, but not right away, that is why I don't want any long call options less than Jan 2018. That gives me 18 months to be right about direction. I will also buy DITM with mim. delta of 95, this is almost like buying the stock except I can control 3 times as much .I have been thinking about your post for sometime and I actually think your strategy has merit. The only problem for me is finding the right opportunities to enter into such a trade and finding the right underlying (how to predict trend and high/low?). Also I find it difficult to just sit on my money either in cash wait for a "fat pitch" or tie up in long term options waiting for events to unfold slowly.
Regards,
If BP pulls back to approximately $35.00 next week I am planning on buying BP 2018 $30 call for around $5.50 prem, delta is currently 95, I am paying very little for Theta, but I understand the clock does tick, however since I will have so much intrinsic value I can get out any time.
I am also looking at just buying the stock out right, selling a covered call Aug 19 2016 $37.50, collecting about $ .42 in prem, holding thru Aug. 3rd X-day ( get $.58 dividend) or get called away with about $2.00 share profit. It is possible to get paid 3 times within 30 days, I would be guaranteed to get paid 2 times.
I invite everyone to tell me where I could improve.
Thanks Stadtmuller Von Texas