Yo Pit Crazies,
Why do I think oil is going to $100?
Well, it always does.
The Covid-related production shutdown with the policy-fueled supply drop was unprecedented.
Now the move to a Covid endemic like the flu will happen relatively quickly. The recent lifting of restrictions in England is a prime example.
The move down in oil should see a similar bounce back up.
Let’s take a look at how to play it …
Oil Stocks Are the New Tech
Wall Street is a fashion business and it can’t wait to get on the new hot thing. Right now, the “it” thing is oil.
In Capitol Gains I am looking at PetroBras SA (Ticker: PBR) because the order flow for the last two weeks has been crazy.
.20 for the PBR Mar04 16 calls!
Lots of call buyers in what is arguably the cheapest oil property out there.
PBR suffers from government interference, but there is a real chance that Brazil divests itself of this property and then who knows what it is worth.
This is a Cap Gains long and I want some duration in this. In Wednesday night’s session we figured out how to finance the calls. PBR paid $1.30 in dividends last year.
The Rundown
Capitol Gains w/ Frank Gregory
Option Pit DC and Wall Street insider Frank Gregory and I run a portfolio approach to trading options with stocks that have good long-term prospects based on Frank’s K Street knowledge and my options expertise.
-
-
- I am still riding my Ford Motor Corp (Ticker: F) calls into earnings. I expect to close the put butterfly Friday.
-
Power Income Trader:
Power Income Trader is a systematic approach to trading inflation. By pulling real-time data from the Fed, US Treasury and Gov’t, Power Income Trader alerts users on changes in money flow driven by Fed policy. Bill’s system puts you out in front of the most powerful money flow in the world.
J-Pow spoke yesterday.
Then Griff laid down the law in a live session that included two picks that are still actionable.
You can only get them when you subscribe to Power Income Trader. (And I suggest you do.)
Option Shopper
Licia Leslie puts on her best trading shoes to find option bargains using market making and charting experience. Generally debit options and spreads with low risk, high reward setups. Short hold times are the norm.
Licia is shopping for Pfizer Inc (Ticker: PFE) calls that are green and holding well in this back-and-forth market.
Pro Trading Room:
The Pro Room is Option Pit’s live access to Mark and myself during trading hours. Our Pro students post trade ideas with Mark and me during the entire trading session.
Giovanni was using Edge Hunter VBS to scalp some gamma in JPMorgan Chase Corp. (Ticker: JPM) on Wednesday.
Big Money Flow
Each week, Option Pit CEO Mark Sebastian looks at size institutional option buying with a twist. He mostly buys calls or puts to ride the large momentum trades.
-
-
- Mark closed out his Occidental Petroleum Corp (Ticker: OXY) for 100% gains.
-
Trading Legion:
The Trading Legion is an intermediate-level education and a long strangle/calendar trading vehicle. The goal is to teach students the best times to buy options.
-
-
- My Ark Funds Ark Technology and Innovation Fund (Ticker: ARKK) put flies and call will likely go out for a 10% gain. I own the call for a 10% credit after closing all the put flies this week.
-
Volatility Edge & Volatility Trading Club:
Volatility Edge is run by Mark and uses the proprietary Option Pit VIX Light indicator to guide volatility trading. The Vol Trade Club is run by me (AG), and employs a long strangle strategy that seeks to use VIX future decay to pay for upside Cboe Volatility Index VIX, iPath Series B S&P 500 VIX Short Term Futures ETN (VXX) and ProShares Ultra S&P Short Term VIX Futures ETN (UVXY) options.
The Option Pit VIX Light Is green for VIX today but I expect to change to yellow by the end of the week.
I am running 2 of 3 trades where I cannot lose and own VIX puts to Feb. 16 expiration.
Remember, a lot of vol strategies I use are market neutral. That means whether SPX or VIX go up or down, the positions still make money. This is a technique you can learn in the Volatility Trading Club and Volatility Edge!
To Your Trading Success,
AG