MyDVICE

- LETTER & VIEWS by NEV R. AGN

PROFIT TARGET SURPASSED!

16 January 2022

 

Time to take profit on our open options positions (3 legs)

Our open positions are the following:

1.  Short a March 2022 WTI 60 Put (shorted at a price of 5.86).  Current price to buy back = 0.19.

2.  Long a November 2022 WTI 85 Call (purchased at a price of 4.63).  Current sell price = 6.45.

3.  Long a December 2022 WTI 90 Call (purchased 16 June 2021 at a price of 1.29).  Current sell price = 5.22.

The initial option structure initiated in 16 June 2021 took in a net premium of 0.25.  The following structure initiated on 1 December 2021 took in a net premium of 1.23.

As per closing prices of 14 January 2022, closing our open positions will receive a net of 11.48.  Adding in the premiums received of 1.48,  gives a total profit of 12.96.  That is, USD 12,960 per each lot of the structure initiated.

** PLEASE REFER TO MY POSTS OF 16 JUNE and 1 DECEMBER 2021 FOR THE VARIOUS REASONS BEHIND THE STRUCTURE.

METALS #11 - ENERGY #17

Metals and Energy post gold-oil ratio derivatives trading

Valentino time – i.e. taking profits!

(a) Excellent cointegration of Brent and WTI and the long-term equilibrium of the spread.

(b) Cointegration of the volatilities between Brent, Gold and the Gold:Brent ratio.  It is the price of Brent that moves more to correct the Gold:Brent ratio back to its long-term equilibrium level.

(c) Profit of USD 12.96 (USD 2.96 more than our target of USD 10 (as per my post on 1 December 2021).

Daily – Gold:Oil Ratio

Daily – Brent-WTI Spread

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