Buy Alert: October 6, 2015

| 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:

US Oil Fund

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