As oil prices tested $110/b, oil call options grew in value. However, there probably won’t be any further growth in the near future because the US crude oil inventories are around their 5-year highs. Moreover, the OPEC increased oil production up to 31,055M barrels a day in February.
Besides, the strengthening of the US Dollar doesn’t’ contribute higher oil prices as well. On the other hand, lower gasoline inventories, tensions over Iran and favorable US GDP stats prevent oil prices from retracing deeper.
In such situations, when there is balance of power in the market, it is more beneficial to sell strangles. The students of the Department of Commodity Trading of proved that selling strangles is 1.5 or even twice as beneficial as selling call or put options alone.
Taking into account the fact that experts constantly analyze the market and know why the price is going in a certain direction at any given moment, they make stable profits by trading a single asset.
