Trade Alert: Running Out of Gas – Buy UGA Put Options
It’s not so much that we’re running out of gasoline as it is that gasoline is running out of gas.
I mean, the price of gasoline is out of energy. Out of steam. Errrr – I think it’s exhausted. And gasoline bulls are exhausted too.
Not since January have large speculative traders in the futures market been so extremely bullish on gas.
That’s when prices failed to make a new high (just the same as it looks today) and the price of gasoline futures plunged by 18% in less than two months. The price would go on to drop another 10% by June.
Does this mean gasoline is set to fall by 18% to 28% in the coming months?
It sure looks like it!
And it’s why I recommend placing a trade to capitalize on the coming move. A trade that could easily take an 18% or 28% move (or even much less) and turn it into a winner of more than 100%. (Kind of like our open Alcoa trade I’ll mention later!)
By purchasing put options on United States Gasoline Fund LP (UGA).
I’m expecting an initial move down through $30 and then as low as $26.50 on shares of UGA.
So, let’s bet against gas with UGA puts as traders begin running out of gas. Here’s what I recommend you do …
BUY TO OPEN 10 contracts of the January 19, 2018 United States Gasoline Fund LP (UGA) put options, with a strike price of $31, symbol UGA180119P00031000, at 1.10 points or better. This order is good-till-canceled.
If this idea makes sense for you, I recommend you place this order as soon as possible.
Also, sit tight with your recent addition of ProShares Ultra Bloomberg Crude Oil ETN (UCO) January $20 put options. I suspect crude oil and gasoline to trade lower together in the coming months, just as they’ve moved higher together recently.
Finally, be ready to jump out of your January $48 Alcoa Inc (AA) put options. You’re sitting on a nice open gain in the ballpark of 119%! And I’m trying to give Alcoa time to push even deeper down through chart support and increase that gain for you. But if it cannot regain momentum soon, it will probably make sense to secure profits on this trade.