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You're right. The market has shifted in the last decade. That's why USO dropped from 60-100 before 2008, stayed around 40 until 2015, and then maintained 10-13
by rwmurrayVT 7y ago
You're right. The market has shifted in the last decade. That's why USO dropped from 60-100 before 2008, stayed around 40 until 2015, and then maintained 10-13 ever since. There's no way it won't rebound slightly when this ends.
If you're risk adverse the $2 calls Jan 21st, 2022 are $3.35. Required move to break even is 9.91%. It dropped 50% MTD. I don't need a full recovery, just a minimum of 10% over the next 2 years.
- anonu 7y ago> just a minimum of 10% over the next 2 years. Misleading... Sure breakeven is 10% if you assume all-else-equal. Your path to profitability is path dependent. If it moved 10% tomorrow, you would probably be hard-pressed to make any money considering spreads and other trading costs. You really need a bigger move to breakeven in a short amount of time.
- FlopV 7y agoCorrect me if I'm wrong but believe he's talking about 2 years out to acctaully purchase the stock ?
- rwmurrayVT 7y agoThat's not correct, nor misleading. The breakeven point would need to be met on the day of expiration. If it shot up 10% tomorrow I would be profitable. I'd still have the value associated with theta less volatility.