OptionsHouse

Options Trading News

July 11, 2013  Thu 11:31 AM CT

USO: SEE CHART GET CHAIN FIND STRATEGIES
An unusual put spread tops today's option trading in the U.S. Oil Fund as it comes off 52-week highs reached yesterday.

optionMONSTER systems show that a trader bought 13,000 September 35 puts for $0.65 and sold 13,000 January 30 puts for $0.42. Volume at each strike was above open interest at each strike, so this is new positioning.

The trade, known as a diagonal spread, is similar to a regular bearish vertical spread but uses the sale of the longer-dated puts to further offset the cost and take advantage of the "skew," as those January 30 puts have a higher implied volatility. (See our Education section)

USO is off 0.96 percent to $37.07 this afternoon, down from yesterday's $37.64 peak. Shares were at a 22-week low of $30.79 in mid-April.

The fund's total option volume tops 95,000 already today, compared to a daily average of 59,420 in the last month. Puts outnumber calls by 6 to 1.
Share this article with your friends


Related Stories

USO

Cramer: Drilling down on oil prices

February 18, 2015

Oil is not going up because of a dearth of supply. We have more coming on than we know what to do with. Then what gives about the price?

Invest Like a Monster - Las Vegas: March 13-14

Premium Services

Webinar Recording

Turbo Charge Your Trading Profits

Education & Strategy

Gamma

As we continue to discuss the Greeks, we come to the first of the strike based Greeks called Gamma. Gamma is known as the second derivative, while delta is the first.

View more education articles »