Quote:
Originally Posted by jay santos
So July 68 meaning oil price of $68 by July? If so, that's what I was talking about. I bet if there were one year puts they'd be as low as $50.
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No, the USO is trading at $76.62 this morning. Oil is up $1.98 and USO is up $1.13. So they don't track exactly. One is up 2% and the other is up 1.5%.
The July 68's are at $3.20 on the ask side. If you held the option until expiration, you don't make money until the USO drops below 64.80. or a drop of 13.43%. Using the 1.5 to 2 ration, that would mean crude would have to drop over 18% or to $79 a barrell.
I don't know if this makes any sense. If it is confusing the first time through, it probably will be everytime through and I wouldn't try to figure it out.
