On CNBC’s “Options Action,” Mike Khouw spoke about crude oil. He named a couple of, normally, bullish indicators for the commodity, the reopening, summer time driving, backwardation within the futures contracts and Goldman Sachs’ $80 value goal.
However when everyone is trying up, typically you wish to take a pause and wonder if it is a bit of bit overexuberant, stated Khouw. He needs to guess that oil may pause a bit earlier than it goes increased.
To make a bearish guess in crude oil, Khouw needs to promote the June $45/$48 name unfold in United States Oil Fund LP (NYSE: USO) for $1.05. The commerce breaks even at $46.05 or 3.65% above the present inventory value. If the inventory trades to $48 or increased, Khouw can maximally lose $1.95.
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