Investing.com - Financial Markets Worldwide
Get 40% Off
Get 40% Off
📈 Free Gift Friday: Instantly Copy Legendary Investors' PortfoliosCopy for Free

Playing The Rangebound Crude Market

ByTrading Advantage
Published 03/31/2015, 12:13 PM
Updated 05/14/2017, 06:45 AM


We continue to play the range bound Crude Oil markets. Now, with potentially a deal with Iran very close to some resolution we want to try and get back in. I think the initial reaction will be to the downside with the market thinking the Iran is promising up to 1 million barrels of production per day. First, the fact if there is deal done or not is not really at issue. The administration has far too much invested in this process already to not walk away with some deal. But even if they get a deal, it is merely a framework. Second, the sanctions are not going to be lifted until the deal is finalized which could take months and months. Plus, we have a lot of groups here with a lot of clout that want to see ANY deal with Iran squashed. Remember we do have a Republican run House of Representatives and Senate. Add to this that it’s probably quite a stretch in the short-term for Iran to come anywhere close to being able to bring 1 million barrels to the market in any timely fashion. Producing oil is not like turning on a light switch. Much of their infrastructure has not been touched since the late ‘70s. We are talking millions of dollars and months of work will be needed. So, we are looking for a quick move down to the lows that were put in early December 2014 around $16.50 for our entry:

We signaled a long call spread, the May 1st (weekly) 18/19.5 call vertical for $0.30 or lower. This would afford us a reward to risk ratio of 4:1.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Latest comments

Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.