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Term Structure
Volatility
Options fall into the category of being slightly undervalued in non-volatile markets in the weekly options report. Ask about the Weekly Option's Report for more information or watch our video.
Notes:
Contract Size - 1,000 barrels.
Tick Size: Outright: dollars and cents with 0.01 points=$10
Trading Hours: CME Globex: Sunday - Friday 6:00 p.m. - 5:00 p.m. Eastern Time (CST).
?ml=1" class="modal_link" data-modal-class-name="no_title">* Tip: Click here to read a helpful tip about Crude Oil futures and options
Charts
Below are charts for reference. F3=38.2 ; F5 = 61.8 retracements ; BB = Bollinger Bands
Currently Crude Oil closed July 12th @ 60.39
Direction
59.76 through center BB week up
60.78 AB-C bearish with doji daily down
Resistance
66.94 Prior high week
65.22 F5 week and prior resistance AB-C
65.13 COP month
62.69 center BB month
Support
58.15 Center BB daily
47.58 Lower BB band month
45.29 COP month
?ml=1" class="modal_link" data-modal-class-name="no_title">* Tip: Click here on enlarging images
Strategies
Below is the starting position for a calendarized fly. It's a variation to a standard butterfly structure where it has positive theta while negating vega to a low positive value rather than being negative. The position minimizing the impact of implied volatility. It allows for time to adjust the spread structure if necessary as price moves within a reasonable range having a relatively flat T+0 line. The position would lose if price broke quickly out of the range without any adjustment.
The % yield shown in the diagrams below represent an estimated return on margin from projected dates shown below. The structure has positive time decay which is an advantage over holding outright options.
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