Oil prices were very soft coming out of weekly options expiry and heading into the weekend. There was considerable open interest in the $37.00 put options (4k) so if those holders were exercised then there ought to be a bit of stock overhanging the market through the coming sessions. As the close of Friday approached a 3m 'BoT' short setup developed. While I am unable to hold onto positions through the weekend, it is relevant to at least respect what the market is telling us. Indeed, if I had my druthers, I would like to be short from the $37.03 area with a stop just above $37.15 (13 ticks risk) and a target of $36.68 (35 ticks potential reward). Ideally, I would prefer to have on 2 cars and cover one at indicated target while leaving the remaining 'freebie' on with a stop at b/e and a target based off the higher time frame analysis....
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CRInvestor
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This is where AOCO orders are so important. Not only does an AOCO have an associated stop loss level (that gets you out at a loss point on the trade if it goes against you) but also a profit level too. All my orders are entered on an AOCO basis.and here is an example of that strategy paying off handsomely. Not only did I get a fill on the opening bell early Monday morning (AOCO to buy back the posted short and take profits) but I got filled far from my price. Indeed The open order should have been at 36.68 and the market opened at .36.48. Interestingly too, price did not move materially lower from that level...