ACE Crude Oil - June 26, 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 volatile markets in the weekly options report. Ask about the Weekly Option's Report for more information.

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

cl weekly

cl daily

* Tip: Click here on enlarging images


Strategies

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 bear call spread.

cl bear.call

A variation is a vertical swap which is a bit more forgiving to the upside though much less positive theta on time decay. Margin requirement is substantially less than above.

cl vswap

Below is a more aggressive bearish calendar fly with positive vega taking advantage of a theoretical edge if implied volatility were to suddenly spike. It is directionally bearish.

cl bear.calfly

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