USO Buyer Pulls in Just Under $3 MM Profit

By Sang Lucci Uncategorized

By Sang Lucci

During late September, the Steamroom has been monitoring some aggressive option activity in USO calls. At the time, oil and gas names were under pressure with light and sweet crude trading under $45/barrel and Exxon Mobil stock taking a beating over a supposed accounting scandal. The player purchased a total of 173K contracts of the October $11.5 call which cost around $3.3 million dollars in pure premium.

Since then, this oil ETF has pushed right in to the money for our large call buyer and subsequently paid out profits to the tune of $3 MILLION DOLLARS.

The player purchased these calls around $.18 cents. Usually when you get these large bets the option gives you ample opportunity to buy it even cheaper. The folks in the Steamroom were able to get this option closer to $.1. I myself bought $.12 and sold $.2, missing out on a lion’s share of the move.

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About the Author

Sang Lucci

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Anand Sanghvi, aka "Lucci", is the founder and head trader at Sanglucci.com. Anand has successfully traded equities and options since 2006, beginning his career as a proprietary trader at PTG Capital. Anand was named head trader utilizing tape reading and options to make his plays. Anand left in 2009 to manage his own money and infamously turned $50,000 into over $2,400,000. He soon founded Sanglucci.com.

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