Weekly Update: August 19, 2015
Weekly Update: August 19, 2015
Big Picture Outlook:
Some interesting data points crossed the wires today…
First of all, the Federal Reserve’s most recent FOMC meeting minutes revealed the US Central Bank is still holding back on raising interest rates. While overall economic conditions are improving, some factors were yet to reach desirable levels (like inflation).
Investors responded to the news with a massive dose of indecision as stocks closed the day down, but off the lows set early in the session.
But here’s what really caught my eye today…
Someone made a $54.3 million put option bet in Exxon Mobil $XOM.
By buying 60,000 contracts of the October $85 puts, a well-heeled trader is betting the world’s largest oil company is about to drop to new 52-week lows.
Without question, this is a development we need to keep a close eye on.
Since $XOM has held up relatively well in the past year’s oil industry downturn, this big bearish bet is a potential harbinger of even worse things to come for oil and gas stocks.
Let’s get to a few of our open positions…
Portfolio Highlights:
Editor’s Note: I won’t update every open position in every update. I focus on the positions with significant news or price movement.
. . . . Market Vectors Junior Gold Miners $GDXJ September 18, 2015 $18 puts
Unfortunately, $GDXJ tagged our risk control line at $22.10 on August 12th. As I mentioned in last week’s update, all traders should have closed this position on a break of our risk control line.
This trade is officially closed.
. . . . Oasis Petroleum $OAS September 18, 2015 $11 calls
After a strong to rally to $11.72 last week, $OAS is slowly retracing back to the $10 area. The recent downturn has our $11 calls back to our entry price at $0.70 a contract.
While $OAS may find support at the $10 area, do not let this once profitable position turn into a loss.
Remember, whether you’re conservative or aggressive, you should have been able to collect 100% profits on these calls last week!
Watch these contracts closely…
. . . . Silver Wheaton $SLW October 16, 2015 $13 puts and $Goldcorp $GG October 16, 2015 $14 puts
These newly released trades are starting off on the wrong foot. Both gold and silver are rallying today as investors flee the burgeoning uncertainty in equities.
With gold and silver higher on the day, miners are following suit.
Remember, our risk control lines are at $15.70 in $GG and $14.30 in $SLW. Conservative investors should exit these positions on a break of those lines!
. . . . Transocean $RIG August 21, 2015 $16 calls
These put options are expiring this Friday. With $RIG trading far shy of our strike at $16, these calls will expire with no value.
Category: Commodity Trading
