Trade Update: USO Call Option Position

Posted in: Trade Of The Week

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Here’s the update to our USO Call Option Position.  There is a possible Stop and Reverse which you can see on the right edge of the below chart.  (Bookmark and check back to this post for subsequent updates for this trade.  I will be dating and posting the updates below.)

We have to be prepared to exit our short position and go long.  It is just as possible that this will be cancelled and we will remain in our short position.  We will let price action determine our next move.

 

In Summary

  • There is a possible Stop and Reverse that has given us a setup to go long.
  • If USO gets to 12.66, close out of your puts position.  This will cut the loss in half, the original stop being at 13.21
  • You can buy May or June 12 calls.
  • If this happens, place your stop at 121.07.  We’ll target 13.10, 13.30, and 14.50

This is a possible scenario.  If the market heads lower, we will continue to hold our original put position and this stop and reversal will be cancelled.  I will update accordingly so check back often.

3/18/18 Update:  The above Stop and Reverse scenario has been cancelled.  This trade is still developing as crude oil seems to be range bound.  There is a new Stop and Reversal however that we have to use to replace the prior one.  Exit the short trade if the price hits 12.76.  You can buy the May or June 12 calls, like with the StopReverse we just cancelled. This time, we’ll be targeting: 13.09, 13.32, 13.56, 14.97 and trailing the rest.  We will move the stop to reduce or eliminate the risk if the price gets to 13.04.  Like the other, as our original short trade continues to develop, we may have to cancel this StopReverse setup as well.  Check back often.

3/20/18; This position did Stop and Reverse today.  Puts should be closed out and June 12 Calls should be purchased.  Targets are 13.09, 13.32, 13.56, 14.97, and Trail the rest.

Buy USO June 12 Calls

032018_USO

Check back for further updates

3/21/18 Update:  Target 1 was reached today.  20% of the position should have been sold for a + .33 per share profit.  Stops should be moved to completely eliminate risk. Move stops to 12.89.  Next objective is T2, 13.56.

3/23/18 Update:  The price hit 13.30 today and came within 2 ticks of T2.  Aggressive traders can scale out 20% of their position.  Patient traders can wait for it to hit the T2 price of 13.32.

032318_USO

3/28/18 Update; The price did hit its stop at 12.89 for + .23 on all remaining positions. This trade is done.

4/2/18 Update; This trade did stop out at the break even stop.

 

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