Ways to trade oil with options?

[Appleseed]

Quote from Appleseed:

If i,m correct the aug puts
sto 95
bto 90
could be done for about a .63 credit with 4.38 margin. thats a 13.6% return for 46 days.
the 95 put is at 49.04 vol. and the 90 is 49.77 vol .
Is that the skew your seeking
cheeers
john

sorry i see my error
john

 

[c.chugani]

Quote from Appleseed:

sorry i see my error
john

yes, i've started to recognise my previous errors as well.

Basically offering volatility cheaper than what the market was demanding for it.

 

[comintel]

Quote from c.chugani:

Given the parabolic moves in oil, i find it risky to go long the underlying at these levels.

I was thinking it would be wiser to put on a vertical spread on USO. ie. sell the 110 august puts @ 5.70 & buy the 100 august puts @ 2.44.

But I still don't like the risk / reward ratio on the trade. Furthermore, the profits are capped in the likely scenario that the commodity goes even higher.

Any ideas with option strategies that might help profit from the continuing rising prices while limiting downside risk?

If you find it better to trade options on another vehicle instead of USO, feel free to post your ideas.

Thanking all of you in advance.

If you have a futures options account, you can trade puts and calls directly on the futures crude price. Symbol LO or CL.