This is a continuation of a directionally neutral premium selling play (See Post Below) which I've rolled out to June and transformed into a bullish assumption premium selling play.
Here, I'm looking to work it as a quasi-synthetic covered call, with the in the money short put standing in for my stock, and the short call acting as cover. Naturally, it isn't...
Despite the terrible fundamentals, I see good money pump to oil exploration market for a while.
1st target is 37.0(Fib 23.6%)
2nd target is 46.3 (Fib 38.2%)
Stop loss@ 31.0 to profit from breakout.
If 31.0 fails, next support is 28.0
... for a 1.03 credit/contract.
Max Profit: $103
Max Loss/Buying Power Effect: Undefined/~3.85
Break Evens: 26.97/34.03
Notes: Going directionally neutral short strangle here with 30-day implied more than twice that of the broad market and giving myself a little room to manage intratrade. Will look to take profit at 50% max (.51).
The daily chart looks like a possible head and shoulders bottom getting ready to run higher to $33 or $38 if news continues to be bullish with large oil inventory drawdowns and SA need oil prices to be higher.
This is a short straddle that started as a double diagonal. (See Post Below). I've been rolling the short straddle body out to generally at-the-money to take profit and to bring in additional credits. Although implied volatility (31%) is at the low end of its 52-week range, it is more than twice that of the broad market; SPY is at 14%.
So far, I've collected...
... for a 1.92 per contract credit.
Max Loss on Setup: $308
Max Profit on Setup: $192
Notes: Another double diagonal, this time in the routinely high implied volatility XOP (currently 35.5%), a la the EEM double diagonal I put on earlier in the trading session. (See Post Below). I've gone shorter duration in the back month...