Crude oil: BOOM! As we near max profit potential, we’re rolling out of our Dec strangle and into a new position

Crude has treated us right over the past few weeks, and our view remains that crude should stay rangebound between $90 and $107. However, with our profits nearly maximized on the Dec strangle, we will roll into a new position. To see our next crude trade, log in to our trading room today!

The Trade with Risk Profile

CL Risk Profile on Exit; courtesy ThinkOrSwim(r)

CL Risk Profile on Exit; courtesy ThinkOrSwim(r)

We just about maximized our profits here; holding the risk of this trade any longer does not make sense from a risk management perspective. We’re taking gains here, and closing out this particular position (and rolling into a new one, as mentioned).

Buy to close Dec ’13 107 Calls: $70
Buy to close Dec ’13 90 Puts: $460

Net Profit:$ 1,066.78 (ex-commissions)

Crude Oil

Crude Oil; courtesy ThinkOrSwim(r)

Taking a quick peek at the chart, we still believe crude will stay rangebound until a meaningful catalyst arises. Price action around the 38.2% retracement level was relatively strong, but on lighter volume. It broke down from there, and should test the 61.8% level next, where there has been significant volume. We should see some strong support around the 94 level. As mentioned, become a premium member today to learn more about our next crude trade.