Saturday, September 21st, 2019

Oil Options Trading

Crude oil prices have fallen into the sixty dollar a barrel range taking oil stocks on a downward ride. Oil options trading is active as many traders think it is time to bet on a turnaround. Likewise Reuters reported massive options action in the Energy Select Sector SPDR after OPEC announced [...]

How to Buy Oil Options

The oil market is often very volatile. Crisis in the Middle East, turmoil in Ukraine and rebellion in Nigeria all threaten to drive oil prices up. Fracking technology is driving the USA toward not only oil and gas independence but a renewed status as an exporter. This fact promises to drive [...]

Make Money with Oil Futures Options

Last week we wrote about how you can make money trading options. This week we look at a specific niche that can be very profitable, options on oil futures. First let us look at the difference between futures and options. Then we look at how to combine the two to make [...]

Difference between Options and Futures

In options trading one can trade options on futures contracts as well as on equities themselves. Having a clear sense of the difference between options and futures is essential in this regard. To understand the difference between options and futures let us start with a couple of basic definitions.
Futures Contracts
Futures [...]

Interest Rate Driven Oil Futures Options

Volatility has risen for options on oil futures. Usually this has to do with basic supply and demand issues and associated market uncertainty. This time it has to do with interest rate driven oil futures options. In short the Federal Reserve has been buying $85 Billion in treasury bills every month. This has served to keep interest rates low and help with the economic recovery in the USA. However, the Fed will now keep this up indefinitely. According to recent comments by Fed chairman Bernanke, the Fed will gradually ease off of this policy as the economy improves. As is often the case word or two by the Fed chairman can rile the markets. In order to make a profitable option trade , a trader needs a glimpse of the future. When we have interest rate driven oil futures options traders look to the Fed for a hint of where interest rates and the economy are going.

Puts or Calls on Oil Futures

Is it time for puts or calls on oil futures? Oil futures options reacted to a recent fall in futures prices. At issue is continued global recovery or a slowdown and even a double dip recession. The US labor market is growing but slower than necessary to keep up with population growth. In the last [...]

Oil Options Volatility

Oil options volatility is up as the European debt crisis threatens to spread to Italy and farther. Oil options volatility is a result of uncertainty. If the parties involved agree to back up Greek and Italian debt as well as that of Portugal markets will settle down. The underlying concern for oil options is that [...]