Stock / Symbol: United States Oil Fund / USO
Price at trade post: $18.95
Option Strategy: [private_monthly]diagonal call spread[/private_monthly]
Reasoning: With USO down nearly 50% from it's high back in August, I'm putting on a delta positive and theta positive trade on USO using a [private_monthly]Jan16 expiration call for the long leg[/private_monthly]. Greeks going into this trade are: 62.7 delta, 2.8 theta, and 5.9 vega. If the short call expires OTM by March expiration, we'll look to sell the April expiring call.
Trade Details:[private_monthly]
BTO 1 USO Jan16 15 Call
STO -1 USO Mar 19.5 Call
for a max net debit of $4.25 per contract (day order, limit order). The mid is currently $4.15. Try for the mid +0.02. Ok to try again tomorrow if not filled today.
Requirements:
Cost/Proceeds $425
Option Requirement $0
Total Requirements $425
Estimated Commission $3
[/private_monthly]
Max Risk: $425
Max Reward: $120 or 28% @ [private_monthly]19.5[/private_monthly]by March 20th
Profit Range: $17.95+ by March 20th
Suggested Upside Stop: $25
Suggested Downside Stop: $16.25
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