Oversold Play in USO

[Steven Place]

The one month rolling return on USO shows us that oil is oversold in the near term.

This is where I would look at put spread sales or just selling puts straight up, but there really isn’t much premium available (it’s the summer).

So I’m looking at August call spreads:

Buy to open USO Aug 36/38 call spread for 0.95 or lower.

I’m starting half size… here’s why:

if USO continues to pull back, I will add capitaly by buying back the Aug 38 call for a profit. That will put me long naked 36 calls. If it sells off more, I’ll roll the calls down to the 34’s.

[Steven Place]

Selling half at 1.37.

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