Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
I would argue against it, as you're long the synthetic 4x1 in puts/futures (short four puts at PF strike, short one futures contract). The ATM combo is the origin of skew (up and out strikes are under ATM, of course), so no vol-edge ATM, but no leverage. I suppose you're using the PF as a stop in this case? A quick shot down to the PF strike will benefit from stickiness, for sure. IMO there are better tail-hedges. Let me know how it goes.
Oh crap, ignore the above. I missed that you're trading CL.
Can you help answer these questions from other members on NexusFi?
Changed my plan and sold the CLZ15 P50 and the CLZ15 C105 at 1600 - 1700 US$.
Implied volatility has risen significantly recently, in my opinion due to tomorrows OPEC meeting. I expect reduction of volatility after the OPEC meeting and, thus, a first profit of the position.
CL is in a downwards trend, but in my opinion the downside is limited to about 65 US$. Price gets close to an area were some production technologies get problems to make money, and where some governments (eg. Russia, Iran) feel uncomfortable. The short call position should take care that losses are in an acceptable range.
Risk on the upside is limited, as I do not think that all oil-producing countries (OPEC and non-OPEC) will be able to decide a cut in production and to produce according to this decision for several months.
I will think about the short put when we get to 65 US$, and I will think about the short call after the establishment of an upwards trend.
Happy Thanksgiving to all of you traders in the US !
This thread has been very quiet lately. Have these recent sell offs caused problems?
The ES has been in a down trend since the first of December and Cl has been down since mid July.