I’m back into USO after selling my shares and buying back my 24-September S33 calls last Friday for a net credit of $32.97 per share. Bought USO this morning at 33.01, sold-to-open S33 calls at $0.44. Breakeven is 32.57, maximum profit is $0.43 per share. Best case this is a 1.3% return for a 5 day investment.
USO continues to bounce around in its trading range. I bought USO at 32.40, and sold-to-open S33 24-Sept expiration calls at .26. Break even i s 32.14, best case profit is $0.86 / share.
For a couple of weeks USO has been in a trading range between 32 and 33.5. Bought USO at 32.77 and sold S33 10-Sept calls at 0.30. Break even is 32.47, maximum profit is $0.53 per share.
Did covered calls on Oil — bought USO at 37.19, sold-to-open May 37 calls at 1.02 for a net investment of 36.18.
Created a bear spread on VIX options today. Betting on VIX going down is forecasting that the market in general will be flat or positive. I sold-to-open June VIX 16 calls at 10.26, bought June VIX 32.5 calls at 1.88 for a net credit of 8.38. I was able to approximately split the bid/ask prices with my combo order. At the time of the order the spreads were approximately 10.00 / 10.60 on the June 16 options and 1.80/1.95 on the June 32.5 calls. Going with the published bid/ask prices leaves money on the table.
The VIX cash index was around 28.5 at the time my order filled. I initially tried to go short on VXX, but Schwab had VXX in the “hard to borrow” category this morning. I suspect lots of people were trying to short the VXX today. I went with June options rather than May because there are only 7 days left on the May VIX options–I wouldn’t be surprised at all to see one more down leg in this correction. I expect the June options will move much down much slower than the VIX index as the market moves away from fear mode.
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