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OPTIONS PLAY: CRUDE OIL Makes New Low For The Move

Stock-Markets / Options & Warrants Dec 12, 2009 - 04:36 PM GMT

By: Matt_McKinney

Stock-Markets

CRUDE OIL has traded lower 7 out of the last 8 days. See my previous blog post for more details: http://mckinneytrading.blogspot.com/..


MY ANALYSIS:
Fundamentally, the supply-side issues seem to be in control here. Simply put, there is a large suppy. Despite consumption on the rise in China, a better than expexcted reatail sales number, and an uptick in consumer sentiment CRUDE OIL traded lower.
Technically, while this market may be slightly oversold CRUDE OIL is in a SUPER-TREND LOWER. See daily chart below.

WE ARE BUYING PUT SPREADS LOOKING FOR LOWER PRICES IN CRUDE OIL!

OPTIONS PLAY
MARCH CRUDE-73.27/BARRELL
OPTION EXPIRY-FEB 17TH
CONTRACT SIZE-1,000 BARRELLS
LEVERAGE FACTOR $1=$1,000
BUY THE MARCH CRUDE 64-59 PUT SPREADS

We also buy in a 3 to 1 ratio an outright CALL in case the market makes a MAJOR move against us.

Do you want to get more of our market insights?
Then please visit the McKinney Trading website today at http://mckinneytrading.blogspot.com for more news, analysis, and trade recommendations.

Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed.
The limited risk characteristic of options refers to long options only; and refers to the amount of the loss, which is defined as premium paid on the option(s) plus commissions and fees.


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