Wednesday, November 16, 2011

Oil Skyrockets: Profit Either Way

Oil has moved north of $100, bringing with it the popular USO and UCO ETFs. Below are straddles for our favorite UCO, computed with StraddlesCalc Tool

The first (top) is for November, the 2nd (bottom) is for December (not November), as pointed out by 'crash' in his comments. UCO is indeed a 2X.

Note: You may receive technical analysis and alerts of these stocks, sent automatically to you, by entering the symbols in the Technical Trend Analysis Tool, (powered by INO).

Please do your own due diligence. This is not advice. Options are very dangerous and may cause 100% loss.

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1 comment:

Crash said...

Your second scenario appears to be for December options (not November) as noted.

Not sure how many people know UCO is a 2 X oil ETF in your example. My initial read of a 4.8% or 18% move in oil was not interesting until the 2X nature of the ETF registered. Perhaps I shouldn't read blogs late in the day.

Going into the close, UCO pulled back to 44.04. Your straddle had already covered the bid/ask spreads and profitable.

Shortly before the close, a $43/45 November straddle was available for $1.40, requiring a maximum move of 3.3%. A lower max move, but if to the down side a lower price is required. We'll know by Friday.

Thanks for pointing it out.

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