Here is a trade I found today.

83.17% probabiliy of profit and a potential 17% gain.

Sell  Aug 30 Puts at .50 and Buy the Aug 28 Puts at .25.

Total cost: .25 per spread.

If you look at the USO chart, there is some resistance at 31.60 so thi strade should do nively.

What do you think?

I just finished a book by Dean Koontz called The Good Guy.

It’s about a guy in a bar that gets mistaken for a hit-man. This guy then goes to find the person who is going to be killed and tries to save her, ultimately falling in love and dodging the killer throughout the book.

Anyway, there was one conversation the killer had with the hero that was interesting. The killer tells the hero,

” Good guys finish last, Tim” and the hero responds,

“Maybe not if they stay in the race.”

To me that sounds like adjusting option trades. When we get in an income option trade we want the underlying stock/etf/index to stay right where it is. It can move up and down as long as it does not stray too far from where we want it to be.

Sometimes though, it does move, and it hurts our position. That’s why we adjust. And [...]

Do Option Sellers Have a Trading Edge?

by John Summa,CTA, PhD

 While there are certainly many viable options-buying strategies available to traders, options expiration data I obtained from the CME covering a three-year period suggests that buyers are fighting against the odds. Based on data obtained from the CME, I analyzed five major CME option markets - the S&P 500, eurodollars, Japanese yen, live cattle and Nasdaq 100 – and discovered that three out of every four options expired worthless. In fact, of put options alone, 82.6% expired worthless for these five markets.

This study analyzes data compiled by the Chicago Mercantile Exchange (CME) for a special options report prepared for this my book, Options on Futures: New Trading Strategies (Wiley & Sons), co-authored by Jonathan Lubow, vice-president of Trader’s Edge, Inc., a futures and options brokerage based in Madison, NJ.
Three key patterns emerge from this study: (1) on average, three out of every four options held [...]

A member sent me this link and I really liked it so I thought I would share it here. The original site I got this from was

http://deliveriesgalore.com/2009/03/18/one-trillion-dollars/

$100

Let’s start with a simple $100 bill – nearly everyone has seen one, and most have used one at some point:

Ahh, hello Mr. Franklin…

$10,000

Now, lets take it a step further – a packet of $100 bills is less than 1/2 inch thick and is worth $10,000. This can easily fit in your pocket and can be used to buy a cheap car or a year of your kid’s tuition:

Vegas, here we come!

$1,000,000

This little pile of cash can easily fit into any backpack and weighs just about 22 lbs. Just in case you didn’t believe that those criminals in the movies couldn’t fit a million bucks in those briefcases, it’s very possible! You’re not likely to ever see this amount of cash in one place [...]