Charting Futures: How to Trade Oil

In this video, Mark Newton from Newton Advisors discusses trading strategies for crude oil options. He analyzes the recent market trends, highlighting a significant pullback and stabilization in crude oil prices. Newton suggests considering long calls due to favorable risk-reward ratios and discusses the importance of volatility in options trading. He provides a specific trade strategy, recommending buying December 53.5 calls, emphasizing the need for a suitable timeframe and the benefits of buying at-the-money options. The video offers insights into market analysis and strategic trading decisions.

What recent market condition has made long calls on crude oil an attractive option?

• A stabilization after a severe price decline

• A decrease in global oil demand

• A significant increase in crude oil prices

• An increase in oil supply

Why is it beneficial to buy options when implied volatility is low?

• It guarantees a successful trade

• It reduces the risk of the trade

• It increases the potential profit

• It makes the options cheaper

What is the recommended time frame for the discussed trading strategy?

• About 20 days

• More than 60 days

• About 39 days

• Less than 10 days

What is the significance of buying at-the-money calls in the discussed strategy?

• It guarantees a profit

• It reduces the impact of time decay

• It minimizes the premium paid

• It maximizes the potential profit

How has seasonality typically affected crude oil prices in the winter months?

• Prices usually decrease

• Prices are unpredictable

• Prices usually increase

• Prices remain stable