• support@madhedgefundtrader.com
  • Member Login
Mad Hedge Fund Trader
  • Home
  • About
  • Store
  • Luncheons
  • Testimonials
  • Contact Us
  • Click to open the search input field Click to open the search input field Search
  • Menu Menu

Follow to Trade Alert - (USO) August 20, 2013

Trade Alert

As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price.

Further Explanation to: Trade Alert - (USO)

Buy the United States Oil Fund September, 2013 $39-$42 put spread at $2.60 or best

Opening Trade

8-20-2013

expiration date: 9-20-2013

Portfolio weighting: 10%

Number of Contracts = 38 contracts.

I think that oil peaked last week with the Egyptian Army?s attack on the Muslim Brotherhood, which killed over 1,000. This has broken the back of the fundamentalist opposition movement which has accounted for the $20 spike in oil prices over the last two months.

This returns us to the longer term fundamental trend for oil, which is sideways at best, and down at worst. The US is flooding the world?s oil markets with energy in all its many forms. There is a ton more of new supply coming. This is what the weakness in the price of natural gas is telling you. The driver here is American fracking technology, which will continue to upend the traditional energy markets for decades to come.

We also received a new negative for oil today, the collapse of the emerging market currencies, especially the Indian rupee. This reduces their purchasing power in US dollar terms, thus raising the cost of oil in local currency terms. As the emerging markets have seen the largest growth in demand for oil in recent years, this can only be bad for prices.

In terms of my own trading portfolio, I want to have a ?RISK OFF? position lie in an oil short to hedge my two ?RISK ON? positions with my existing shorts in the Euro (FXE) and the yen (FXY). US stock markets could be weak into September, and they will take oil down with them.


Buy 38 September, 2013 (USO) $42 puts at??$4.35

Sell short 38 September, 2013 (USO) $39 puts at.?.$1.75
Net Cost:????????????....??..??......$2.60

Profit: $3.00 - $2.60 = $0.40

($0.40 X 100 X 38) = $1,520 ? 1.52% for the notional $100,000 model portfolio.

USO 8-20-13

Share this entry
  • Share on Facebook
  • Share on X
  • Share on WhatsApp
  • Share on Pinterest
  • Share on LinkedIn
  • Share by Mail
0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2013-08-20 15:29:012013-08-20 15:29:01Follow to Trade Alert - (USO) August 20, 2013

tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with Mad Hedge Fund Trader (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade and/or any of its affiliated companies. Neither tastytrade nor any of its affiliated companies is responsible for the privacy practices of Marketing Agent or this website. tastytrade does not warrant the accuracy or content of the products or services offered by Marketing Agent or this website. Marketing Agent is independent and is not an affiliate of tastytrade. 

Legal Disclaimer

There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.

Copyright © 2025. Mad Hedge Fund Trader. All Rights Reserved. support@madhedgefundtrader.com
  • Privacy Policy
  • Disclaimer
  • FAQ
Link to: Trade Alert - (USO) August 20, 2013 Link to: Trade Alert - (USO) August 20, 2013 Trade Alert - (USO) August 20, 2013 Link to: August 21, 2013 - Quote of the Day Link to: August 21, 2013 - Quote of the Day August 21, 2013 - Quote of the Day
Scroll to top