Calls Hot on United States Oil Fund LP ETF, While Puts Pop on Schlumberger Limited

Crude oil is lingering near multi-year lows, sending United States Oil Fund LP ETF (USO) and Schlumberger Limited (SLB) lower -- and VelocityShares 3X Inverse Crude ETN (DWTI) higher

Aug 19, 2015 at 1:46 PM
facebook X logo linkedin

Crude oil is taking a beating today, after the Energy Information Administration (EIA) said stockpiles unexpectedly rose last week. In fact, the September-dated contract fell to its lowest point since March 2009 earlier, and was last seen down 4.5% at $40.71.

The sell-off in black gold has created a boon for the VelocityShares 3X Inverse Crude ETN (NYSEARCA:DWTI), with the exchange-traded note up 11.1% at $186.90. However, this is just more of the same for DWTI, which has nearly tripled over the past two months -- and surged more than sixfold in the last 52 weeks.

Crude basket United States Oil Fund LP ETF (NYSEARCA:USO), on the other hand, is not faring so well. The exchange-traded fund has shed 4% to churn near $13.49 -- and earlier bottomed at an all-time low of $13.42. Longer term, the shares have surrendered almost 34% year-to-date.

Option traders have been eyeing a bounce, though, and at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), USO's 10-day call/put volume ratio of 1.21 ranks in the 83rd annual percentile. In other words, calls have been bought to open over puts at a faster-than-usual clip.

This trend is continuing in today's session, with United States Oil Fund LP ETF calls crossing at two times the average intraday pace. Most active is USO's August 14 call, where it appears a number of new positions have been purchased.

Drilling down on specific equities, Houston-based Schlumberger Limited (NYSE:SLB) is taking it on the chin today -- off 2.6% at $80.97, and on pace for its lowest close since mid-March. This only echoes the equity's longer-term trajectory, with shares of SLB down 26% year-over-year.

In the options pits, speculators have shown a distinct preference for puts over calls among options set to expire in three months or less, per SLB's Schaeffer's put/call open interest ratio (SOIR) of 1.38. What's more, this ratio sits higher than 81% of all similar readings taken in the past year, meaning speculative traders are more put-skewed than usual toward SLB.

In the front-month series, peak put open interest of 9,915 contracts is located at the August 85 strike. Today -- with puts crossing the tape at four times the average intraday pace -- this is the third most active Schlumberger Limited option, and it appears some traders are closing out of their positions ahead of Friday's expiration.

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI