| Dear Friend,
The current uncertainty of oil prices has resulted in a huge IV disparity between the 19Jan18 options (IV=36) and the 02Dec16 options (IV=64). Here are the trades I made in my personal account today when USO was
trading at $10.47:
Buy To Open 20 USO 19Jan18 10 puts (USO180119P10)
Sell To Open 20 USO 02Dec16 10 puts (USO161202P10) for a debit of $1.20 (buying a calendar)
Buy To Open 20 USO 19Jan18 10 calls (USO180119C10)
Sell To Open 20 USO 02Dec16 10.5 calls (USO161202C10.5) for a debit of $1.58 (buying a calendar)
The risk profile graph shows a double-digit gain this week across a wide range of possible prices. The 10 put which expires Friday garnered $.23 which was 10 times the average weekly decay on the 2018 10 put.
I love these trades, and thought I would pass them on in case you might like to try them yourself.
Happy trading.
Terry
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