Crude Oil fundamentals are still pointing lower in my opinion, US fracking companies are pumping at their highs and OPEC is fracturing apart. Regardless of OPEC’S production cuts, some non OPEC countries are pumping at or near their highs. Data from the EIA shows solid stockpiles of crude oil. Also providing stability to the oil outlook in my view is OPEC countries like Nigeria, needing to keep Oil flowing because they depend on oil revenue for their economy in a big way, also China’s oil output will still increase to get back their investment money from deep sea exploration and fracking. In my opinion I look for Oil to go lower towards$42.00, last as of the writing 51.81 in MARCH 19 futures.
With this in mind consider the following trades:
Buy MARCH 2019 43.00 Puts costing .63 = $630.00 of quantifiable risk plus fees and associated costs per transaction to enter the trade, the MARCH 2019 45.00 Put cost .79 = $790.00 of quantifiable risk plus fees and associated costs per transaction to enter the trade, or the 42.50 Put costing .47 = $470.00 of quantifiable risk plus fees and associated costs per transaction to enter the trade.
I always provide a contrarian view to my strategies, so look at the MARCH 58.50 Call costing .92 = $920.00 of quantifiable risk plus fees and associated costs per transaction to enter the trade, in case of market disruptions or a geopolitical event.
The MARCH 2019 options settle in 62 days 2/14/2019 on MARCH 2019 futures.
To discuss any strategies please feel free to call 888 391 7894 or email peterori@walshtrading.com
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