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Easy $ – just sold puts 25% OTM on oil !!

October 16, 2014

By | 3 Comments

Just sold some Naked puts on /CL 60 strike. Crude light oil futures. Getting .03 cents and .04 cents while they last. attached a shot to show the chain and that I am already building a position. Love naked puts on oil, /Cl found support on a high 79 handle and is due for bounce. Option premiums are high and 60 strike is 25% otm. Credit on .o3cents is 30$ since its a 1000 barrels per contract.. expires in 1 month if otm 30$ credit on 330 margin held is about 9% in a month. Check out our watchlist and trades under scouting report at tackletrading.com last weeks list was big time profitable. new report comes out saturday morning.CL 60 strike

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3 Replies to “Easy $ – just sold puts 25% OTM on oil !!”

  1. Dmitriy S says:

    Awesome! Gino, why not sell 60.5 or 61 strikes for little bit more premium (mid price around .07)

    thanks

  2. Dmitriy S says:

    Also, can i sell vertical with little higher strikes since i cannot sell naked?

    Thank you

  3. Dmitiry Great question, You can sell the Higher strikes, but I am not greedy and that is why I have been a survivor in the Markets. First off 32% a month on a credit spread is a homerun. I like the 98% odds on credits. I got the name Theta maker because I have been so successful at making these trades. but really it is because I only do them if I really have great odds and happy with the return.
    Secondly, I do have the higher strikes and usually like to get .03 or .05 cents per barrell and that allows me to close the position when it hits .01 or .02 Cents. sell for .05 then buy for .01 as soon as possible. and not have to wait till Expiry.
    You will notice though that being closer to the price is not only riskier, BUT the margins they hold up for collateral are higher when trading futures options , not the case in stock options. So actually the return over risk is better farther out of the money rather than closer to the money.
    But for the conservative trader, selling the farthest one possible and letting it expire is the best odds of winning. Downside is its just there all month waiting for expiry. We call this “Taking it to the grave”.
    Also spreads are possible to, but you have to widen it. Most oil futures spreads are 5 or 10 points wide, and few are even 2.5 points wide. Look at the open interest it will show the popular strikes. I try to avoid the .50 cent strikes.

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