Options Trading Strategies For Oil - PowerPoint PPT Presentation

Loading...

PPT – Options Trading Strategies For Oil PowerPoint presentation | free to download - id: 7f0e7f-NzY5O



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Options Trading Strategies For Oil

Description:

With oil making headlines again, let’s look at some options trading strategies for trading the popular commodity. – PowerPoint PPT presentation

Number of Views:16

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Options Trading Strategies For Oil


1
  • OPTIONS TRADING

Options Trading Strategies For Oil
2
Welcome to Options Trading Research Your premier
site for news and information on Profitable
Options Trading. For more info on Options Trading
visit our website www.OptionsTradingResearch.com
3
  • Get Your Free Report For The Best Options To Buy
    For 2016!
  • Well tell you about this
  • Special Offer
  • at the end of the video!

4
  • Hi, My name is Steve and Im with Options Trading
    Research, today were reviewing our recently
    published article

5
  • Options Trading Strategies For Oil

6
  • If youve been following the financial news
    lately, youve likely seen a lot of talk about
    oil. This time however, its not because the
    price of crude is skyrocketing. Instead, its
    because oils price per barrel has hit multi-year
    lows.

7
  • In fact, West Texas Crude Oil is at the lowest
    level its been at since the financial crisis of
    2009. Minus the financial crisis period, oil
    hasnt been this cheap since around 2004.

8
  • So what should we expect from crude in 2016?
    Keep in mind, I recently said to avoid using
    bullish options strategies for oil next year. I
    definitely think the supply glut will keep prices
    low for the foreseeable future.

9
  • So what options trading strategies should we use?

10
  • First take a look at this chart of crude oil
    WTIC over the last year

11
(No Transcript)
12
  • The chart of crude oil shows how black gold has
    done this year. Prior to the summer, it actually
    hit 60 per barrel for a couple months. However,
    the price has since plunged, and is now trading
    well below the 50-day moving average.

13
  • Whats more, the price of oil is sitting below
    the 40 mark. That price seems to hold some
    significance among oil traders/investors as a
    sign oils bear market will continue.

14
  • As I said before, Im not a fan of oil for 2016.
    That doesnt mean it will stay below 40.
    However, a return to 60 or above isnt likely
    anytime soon either.

15
  • So what options strategies should we consider?

16
  • Given the macro environment for oil, there are a
    few ways to tackle options trading strategies.
    First off, you can trade oil in many ways,
    including but not limited to oil futures, ETFs,
    and oil companies.

17
  • The easiest way to trade oil as directly as
    possible is by using ETFs. However, you do have
    to consider contango costs associated with
    commodity ETF in general.

18
  • On the other hand, major oil companies are so
    heavily invested in natural gas these days, they
    arent pure plays on crude either.

19
  • Regardless of what instrument you choose, I
    believe selling out-of-the-money puts are one
    good way to make money on cheap oil.

20
  • There is still some downside risk, so puts should
    hold value. On the other hand, how low can oil
    realistically go? There is a floor out there for
    sure.

21
  • On the other hand, using covered calls is a safer
    strategy to utilize to generate income. There may
    not be as much yield upside, but the limited
    upside in oil itself lends itself well to a
    covered call strategy.

22
  • The key theme is I would lean toward selling
    options on oil products for the time being. Even
    if oil volatility picks up, there isnt likely
    going to be a huge move in either direction
    unless the oil market fundamentals significantly
    change.

23
  • Want More from Options Trading Research.com?
  • Follow us on Social Media

24
  • Want more FREE information on Options Trading?
  • OptionsTradingResearch.com

DOWNLOAD NOW!
25
READ THIS FREE REPORT!
The Best Options To Buy Right Now!
About PowerShow.com