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February 6, 2013  Wed 11:22 AM CT

USO: SEE CHART GET CHAIN FIND STRATEGIES
The U.S. Oil Fund is seeing an unusual call spread that is actually bearish on the name.

optionMONSTER systems show that a trader bought 4,500 March 34.50 calls for the ask price of $1.24 and sold 4,000 March 33.50 calls for the bid price of $1.94. The volume was higher than the previous open interest at each strike, so this is a new credit spread. (See our Education section)

This trade takes in a credit of $0.70, which will be the gain if the USO is below $33.50 at that March expiration. The credit spread is virtually identical to buying the 34.50/33.50 put spread to profit from a drop in the share price of the exchange-traded fund.

The USO is up fractionally at $35.05 this afternoon, continuing to trend higher from support just above $32 in the last two months. But this week is the first time it has traded below its 10-day moving average since mid-December.
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Options Academy: Ron's Risk Calculation--A Real Life Example

It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

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