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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Commentary
- High as 35.76 to multi-month highs as we close May
- Rig count numbers indicating draw, declines coming offline
- U.S. & China with tough talks but no indication on tariff change or phase one
- Short covering on last 20 mins of trading session pushed to 35.76 level
- Coming close to fill gap when drop occured on the Saudi-Russia ordeal earlier
- Trends pushed down to 32 and held as a support level
Term Structure
Volatility
Options fall into the category of being slightly overvalued in volatile markets in the weekly options report. Ask about the Weekly Option's Report for more information.
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: Understanding what the numbers mean when looking at Crude Oil prices. The quotation you see is U.S. dollars and cents per barrel (42 gallons). Each contract you are buying or selling is 1,000 barrels. A 1 tick move is $10 USD calculated as $0.01 x 1,000 barrels.
?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
Weekly and Daily Charts
* Tip: To view a larger chart image, simply right click on the image with your mouse. Next, select view image. Be sure to click the back arrow on your browser to go back to the original page.
?ml=1" class="modal_link" data-modal-class-name="no_title">* Tip: Click here on enlarging images
Strategies
Below illustrates a directional play to the upside using a bull put.
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.
Below is a strangle swap
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