ACE Crude Oil - January 13, 2020

Below is an illustration trading futures options on Crude Oil.  Our post shows bullish and bearish positions using a combination of call and put options.


Trade Options on Futures

Crude Oil * Directional & Neutral Positions

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Term Structure

CL term


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.

CL OptV


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).

* Tip: Click here to read a helpful tip about Crude Oil futures and options


Charts

Prices have fallen sharply since the earlier news of escalations between the U.S. and Iran near the Fibonacci 61.8% retracement level. Volatility has tapered slightly below recent historic levels.

CL Daily

* Tip: Click here on enlarging images


Strategies

Below illustrates a starting position for a strangle swap consisting of selling March month options and purchasing a straddle in a deferred month (April). If prices move too high, the position could be adjusted if prices move to extremes near sold options.  

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.

CL survey

CL SSwap

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