Leaking Out Part of our Oil Trade
We have seen a tremendous run in oil and, as such, our USO call option has enjoyed some decent gains. As the market stumbles a bit and we enter a seasonally difficult time for both equities and oil, we believe it would be prudent to break apart our United States Oil (NYSE:USO) put and call trade and sell the call position only.
We believe the physical supply in crude is flashing a warning sign and that the oil markets are setting up for a sell-off much like what we saw last spring. When we get this sell-off, we will look to exit the put option at a more favorable price. Upon receipt of this alert, sell the USO May 20 $11 calls (USO160520C00011000), which last traded at 66 cents.
Best,
Doug and Tom
Jim Woods is a 30-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor.
His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. Read more about Jim Woods.
