Newbie futures question

Discussion in 'Energy Futures' started by timscott, Jun 10, 2008.

  1. I faded oil this morning buying 10 otm USO puts for $2 / contract.

    Oil dropped @ $5 intraday, puts went to $4, for a $2k profit.

    What would be the profit trading roughly the same dollar amount shorting oil futures for a $5 move?

  2. Tick = $10
  3. olias


    A crude oil futures contract size is 1,000 barrels. Every dollar that the futures moves is equal to $1,000 of profit or loss ($1 per barrel in other words). July crude oil is down about $2.50 for the day right now.
  4. $5,000.00!!!!!!!!!!!!!!!!!!!!!!!!!!
  5. be carefull, the crude oil is in a contango, when this happen, USO tend to get "out of wack".
  6. Timscott:

    I find ITM options (2 to 3 strikes) to be much lower risk than OTM.

    YES, they're more expensive but you're getting more "bang for your buck"

  7. I only had to put up $2k, i was wondering if it even possible to only put up the same $2k in oil futures and making the same profit.

    Kind of looking for best bang for the buck / lowest risk / highest return....
  8. In most firms you have to cough up the whole margin (as of today almost 12,000 USD), but in a few they have lower intraday margins (as low as 2,000, I hear, although I trade with IB and it is the full margin). There is also a e-mini contract at half the price and size.

    So in order to make 5,000, 500 or 50 first you're gonna need 12,000. I guess that for smaller amounts you're limited to options.

    Best trading,