OPEC will not cut production

OPEC elected to not to cut production from the quota of 30 million barrels a day at the meeting in Vienna. Here are a few charts that have impact on or will get impacted from this decision:

USD XLE_C

Here is the impact on Oil prices today:

CL_F_B

It is not likely to hold the $70 level.

One more thing to add here is the VERY large bet made on the $XLE ETF using the December 05 weekly Options:

XLE_Dec05w_Options

That isn’t a clerical error – that is just over 120K contracts at the $83 Put strike. That’s what I call a BIG footprint.

 

-DM 10:30 AM CST

Trading Activity

Updated

I will be traveling today so will be light on my trading (for new trades at least). Here is the activity so far today:

Ctrip.com $CTRP
I went Long stock in P/M at $51 (1/4 size, starter position, Submarine Basket) but have seen that hit a Stop already today. I am considering a new trade: a December 53/57/51 Risk Reversal Call Spread

Veeva Systems $VEEV
I have an Earnings trade on. I have already StC the December $29 Calls thus leaving a Short 31/26 Strangle. I have added a Long stock piece at 30.60 now (a hedge) based on this 5m chart:

VEEV_5m

RCS Capital $RCAP

I have sold the Long stock piece today. This leaves me with the Long December 12.5/10 Put Spread. Options Net: -$.30 & stock gains of $2.313

Skyworks Solutions $SWKS
I have adjusted the short December 05 weekly 65 Calls to the December 26 weekly $66.5 strike. The trade is now a December 05 weekly 63/61 Risk Reversal with Short December 26 weekly 66.5 Calls. Another way to look at the trade: Long Dec 05w/26w 63/66.5 Diagonal Call Calendar with Short Dec 05w 61 Puts. Options Net remains: $.27

 
StC = Sell to Close
P/M = pre-market

 

Trading Activity

Existing Positions:

Alibaba $BABA  I have done several things today: 1) added more Long stock (as a hedge) at $114.05 to go along with the Long stock at 112.70 I already have (so now a 2x size stock position). 2) I have adjusted 1x of the Short November 28 weekly $114 Calls up to $115 for a .47 debit. So the Call Ratio is now 110/114/115 for this week. Options Net is now: $.77

SPDR S&P Retail Index $XRT  I have adjusted the Short Calls to the December $93 strike (Fab 5). Options Net now: $.53

New:

Palo Alto Networks $PANW  I was Long stock (post-Earnings trade) but have closed the stock position & switched to a December 05w 115 Risk Reversal

Trading Activity

Updated

I have only made 2 adjustments to existing positions today:

Zillow $Z  I have StO November 28 weekly 121/110 Strangle for a $1.25 credit. I now have a 120/121/110 Risk Reversal CS for this week. Options Net improves to: $3.47

Potash $POT  I have StC the December 05 weekly $35 Calls. This leaves a Short 38/33 Strangle for next week. Options Net now: $1.40 (Submarine Basket)

I have been more active for clients today. Newly added or bidding in the Cabernet portfolio:

  • $IBM  (Call Calendar with Short Puts)
  • $BA (Straddle/Strangle Swap)
  • $SYK (Double Calendar)
  • $WAB (Double Calendar)

November 28 weekly Option expiration plan

For those that trade Options as part of their overall Trading Process it is an important task each weekend to prepare for – and create a plan for – the upcoming week expiration. I do have Options each week that are set to expire so this is always a part of prep work.

Here are the existing positions that I have with November 28 weekly Options as part of the trade:

$JCP
$FB
$XRT
$CELG
$GILD
$FDX
$UNH
$BABA
$Z
$TLT