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:
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Futures trading is risky and not suitable for all investors.
The commentary and examples are for teaching purposes only and are not intended to be a trading or trade advisory service. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein on the web site and/or newsletter, are committed at your own risk, financial or otherwise. Trading with leverage could lead to greater loss than your initial deposit. Trade at your own risk. Investors and traders are responsible for their own investment/trading decisions including entries, exits, position, sizing and use of stops or lack thereof. This is not a trade advisory service and is for educational purposes only. The content on the pages here is believed to be reliable - but we cannot guarantee it.
Don A. Singletary is a teacher and writer. For 25 years he was a commodity risk management (hedge) consultant for major corporations. He is the author of Option Income Training Bulletin, the only such publication dedicated to teaching small/medium personal investors how to sell commodity options for a second income, a strategy traditionally used mostly by professional investors, the wealthy, and money managers.
While this website is for subscribers only, you can get full access with a free trial subscription. Also you may visit his blog with many trade examples and articles on this valuable strategy at: SellingCommodityOptions.com
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:
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:
If you are new to the Option Income Training Bulletin, check out the training videos at this TAB
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TastyWorks: $2,000 minimum to open account. Easy online application, free ACH money transfers. Here’s my affiliate link for TASTYWORKS. International Accounts for 70 countries available.
The commentary and examples are for teaching purposes only and are not intended to be a trading or trade advisory service. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein on the web site and/or newsletter, are committed at your own risk, financial or otherwise. Trading with leverage could lead to greater loss than your initial deposit. Trade at your own risk. Investors and traders are responsible for their own investment/trading decisions including entries, exits, position, sizing and use of stops or lack thereof. This is not a trade advisory service and is for educational purposes only. The content on the pages here is believed to be reliable - but we cannot guarantee it.