Buy Alert: October 6, 2015
Buy Alert: October 6, 2015
Option Strategy:
Buy US Oil Fund $USO December 18, 2015 $15.50 calls for $1.30 or better.
Commodity Outlook: Crude Oil
We have to be quick today…
WTI crude is breaking out of a tight, month-long trading range at the $45 a barrel area. As I write, the commodity is pushing higher to $48. If today’s breakout rally holds, there’s a very good chance WTI continues higher to $50 and possibly the $55 area in coming weeks.
Here’s how you capitalize on further upside in crude…
Resource Trade: US Oil Fund $USO
As you know, we already have an open position in the $USO November 20, 2015 $14.50 calls. I suggest you close that trade now (the position is currently breakeven) and roll out a month to the $USO December 18, 2015 $15.50 calls.
The current bid/ask spread for this contract is $1.19/$1.21.
Do not pay more than $1.30!
Our official entry price for performance tracking is $1.21. Your price may be higher or lower.
Exit Strategy:
Remember, we want $USO to trade higher. Our first profit target is $17.00 while our second target is at $19.00.
Our risk control line is $14.15. If $USO trades below that level, conservative investors should consider closing this trade to preserve capital.
Category: Commodity Trading
