hcgdavis 7:27 am on Wednesday, May 31, 2017

rolled Aug 17 /CL 57…

rolled Aug 17 /CL 57 calls down to 55 to take some profits and bring in more cash on the down move in oil.

fuzzballl 9:45 am on Wednesday, May 31, 2017

Chickened out on my /CL strangle when I realized there weren’t weeklies available ( kind of an unwritten rule for me requiring weeklies for management).

Lost .20 on this one. Had a BuPS a few weeks back that made .16 so net loss of .04 on my short venture into the oil fields. Still on the radar just in case it really “tanks” can look to get long again.
- hcgdavis 10:07 am on Wednesday, May 31, 2017
  
  as long as you have the margin to cover the actual futures contract you can hedge it. Currently 3-4000 per contract.
  
  I will generally let the strangle run but if either side gets to a delta 30 I will then start adjusting.
  
  I did not have to adjust this morning but had $360 in profits in the call side in only 6 days so it was worth pocketing that and rolling to a lower strike to bring in more cash.
  
  I will keep posting adjustments as I make them. Sometimes you run out of bullets and either have to close it, buy or sell the future or just get out.
  
  2 years ago I had strangles when oil was at 100-110. I managed fairly well until it dropped below 60 then just ran out of ammunition. If I recall I had to butterfly it just to keep the losses manageable. Even short the futures the margin requirements were too high for holding overnight.
  - fuzzballl 10:33 am on Wednesday, May 31, 2017
    
    Without weeklies to help manage a possible inverted position, I didn’t feel like messing with it. Margin wasn’t an issue with a single strangle. I may look to add some XLE strangles to the mix instead.
    - hcgdavis 10:47 am on Wednesday, May 31, 2017
      
      TOS wouldn’t let me invert when oil dropped that much so limits management but I agree weeklies makes it easier to roll/manage.
      
      The main thing I like about /CL is the fierce theta decay. Take a delta 8 option on /CL and look at it 90 days, then 60 days same strike, and 30 days same strike. 50-80% decay from 60-30 days!
      
      Right now my 41.5/55 strangle is worth 0.44 with 47DTE. At 15 DTE that same strangle is worth 0.07 to 0.09.
      
      In /CL the multiplier is 1000, not 100 on options so even on small contract size that is good leverage but have to be careful with it. That is why I was not posting trades until I saw everyone here knows what they are doing. Smaller accounts can trade USO but I find the premiums are too low there.
      
      This is a great group! I was trying to create a group locally for options trading but very few people take the time to learn it. Good to be among traders that have similar ideas and trading styles.