03-31-2020, 09:59 AM
(03-31-2020, 09:28 AM)vbin Wrote: @Otter why u are buying USO puts, USO works on futures. Why not oil stocks?
USO LEAP calls, not puts.
I don't want to bet on any one company, just the price of WTI. Sure, maybe it drops to $15, but WTI has already been severely hammered and the energy traders are well aware of global demand issues, Russia/Saudi actions, and the fact that tankers and storage are filling up with unsold crude. That's one of the reasons crude didn't participate in the recent market rally. I think there would need to be news of an imminent asteroid strike to drive WTI much lower.
I'm okay playing with the risk of contango at 20-year lows on LEAPs that should spike pretty good the second there is any good news at all. USO has a ton of daily volume as well, and has a robust options market tied to it.