Two uso trades, one closed, one spread opened

http://stockcharts.c...amp;a=224787904

http://stockcharts.c...amp;a=224787871


For debating and learning purposes, please feel free to critique.

I opened the USO trade last week on the trend break, I posted a few charts of it here, here it is infact

http://stockcharts.c...amp;a=224787904

Today though I sold the Feb $40's with 46 cents time value on em with two days left
Bought the March $40's for $1.42 (dont remember the exact numbers except the debit was .96

With two days left I'd be happy to roll forward and up the Feb $40's should uso hit $40.50 on Friday to March $45's or something. I cant imagine, the MM's dont have a pinning interest in keeping this muted a bit, but I'm not knowledgeable enough on pinning so I shouldnt really factor that in, and dont.

I figure this trade gives me some protection on a failed breakout. That was the purpose of spreading instead of an outright call buy for MArch. I'm not totally comfortable buying after the massive gap up, so this helps a bit, at the same time, I cant not be long oil at the Feb lows seeing how incredibly strong oil seasonality is. I believe the figure is 80% of Feb's are bottoms the past 25 years in oil.

So, there's a bit of what I was thinking.

Any insights from people outside this trade would be welcome.

thanks

http://stockcharts.c...amp;a=224787904

http://stockcharts.c...amp;a=224787871


For debating and learning purposes, please feel free to critique.

I opened the USO trade last week on the trend break, I posted a few charts of it here, here it is infact

http://stockcharts.c...amp;a=224787904

Today though I sold the Feb $40's with 46 cents time value on em with two days left
Bought the March $40's for $1.42 (dont remember the exact numbers except the debit was .96

With two days left I'd be happy to roll forward and up the Feb $40's should uso hit $40.50 on Friday to March $45's or something. I cant imagine, the MM's dont have a pinning interest in keeping this muted a bit, but I'm not knowledgeable enough on pinning so I shouldnt really factor that in, and dont.

I figure this trade gives me some protection on a failed breakout. That was the purpose of spreading instead of an outright call buy for MArch. I'm not totally comfortable buying after the massive gap up, so this helps a bit, at the same time, I cant not be long oil at the Feb lows seeing how incredibly strong oil seasonality is. I believe the figure is 80% of Feb's are bottoms the past 25 years in oil.

So, there's a bit of what I was thinking.

Any insights from people outside this trade would be welcome.

thanks

as I type it just hit $40! doh!

http://stockcharts.c...amp;a=224787904

http://stockcharts.c...amp;a=224787871


For debating and learning purposes, please feel free to critique.

I opened the USO trade last week on the trend break, I posted a few charts of it here, here it is infact

http://stockcharts.c...amp;a=224787904

Today though I sold the Feb $40's with 46 cents time value on em with two days left
Bought the March $40's for $1.42 (dont remember the exact numbers except the debit was .96

With two days left I'd be happy to roll forward and up the Feb $40's should uso hit $40.50 on Friday to March $45's or something. I cant imagine, the MM's dont have a pinning interest in keeping this muted a bit, but I'm not knowledgeable enough on pinning so I shouldnt really factor that in, and dont.

I figure this trade gives me some protection on a failed breakout. That was the purpose of spreading instead of an outright call buy for MArch. I'm not totally comfortable buying after the massive gap up, so this helps a bit, at the same time, I cant not be long oil at the Feb lows seeing how incredibly strong oil seasonality is. I believe the figure is 80% of Feb's are bottoms the past 25 years in oil.

So, there's a bit of what I was thinking.

Any insights from people outside this trade would be welcome.

thanks

as I type it just hit $40! doh!

think I forgot a little bit about the vast difference in the gamma!

sounds very good! btw/Did you sell covered call? it projects 45 USO....intraday R@40 S@39-38