20 August 2019 TUESDAY newsletter

20 August 2019 TUESDAY newsletter

Greetings:  NEW TRADE today:

I sold a Crude Oil DEC19 strangle today- selling the 75 CALL and the 35 PUT:  I put in a spread order to sell the strangle for a total of 0.15 ($150)  I got .09 for the 35P and .06 for the 75C = 0.15 ($150.)

The initial margin requirement for me was $609.  The underlying DEC19 Crude Oil was trading near 54.46
Prob. of OTM: about 97%.
Based on the initial SPAN minimum margin of $609, the return possibility, excluding commissions, would be about 150/609 or about 25%*  These options expire in 87 days on 15 NOV 2019.

* During the trade there can be additional margin required, so this method of determining the ROI, is not always accurate.

Here is the chart on this trade: 

Comment:  Although trading during times of high volatility, at present, I am willing to chance these two strikes might stay out of play for a while.  The weekly USA crude inventory report is tomorrow, you can see it at the EIA website (1 PM ET) at: https://www.eia.gov/petroleum/supply/weekly/

This EIA website has a lot of great information, free charts, xls files, and more.

This is part of an article out today at Marketwatch:

“Crude’s trading path over the next 48 hours should be heavily influenced by U.S. inventories once again, especially given the turn towards crude storage builds in recent weeks,” said Robbie Fraser, senior commodity analyst at Schneider Electric. The U.S. government has reported crude supply increases in each of the last two weeks.

“Consensus market estimates have called for a slight draw” from American Petroleum Institute numbers due out late Tuesday, followed by Wednesday’s “more definitive” Energy Information Administration report, said Fraser. “However, as WTI’s discount to Brent narrows, U.S. exports could be challenged, leaving more supply to be absorbed by a U.S. refining sector that is nearing the end of the peak demand season.”

Corn:  The results of a crop tour, The Progressive Farmer Crop Tour,  for corn and soybeans will be released (NOT USDA) this Friday.  Details are here: https://www.agweb.com/profarmer-midwest-crop-tour

I continue to shop for Gold strangles this week.  Soon as I find something I’ll post it and notify by email per usual.

That is all today.  Good trading to all. – Don

Don A. Singletary

Summary of Current Positions for today: 20 August 2019:
Today’s short Crude Strangle and the short DEC19 Corn 430 CALLs, which you can view at the 14 August tab (below.)  I only have these two positions right now:

14 August 2019 WEDNESDAY newsletter

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