OIL THROWS UP

“Thy name is oil!”

And the race to the bottom is on! … and the ugliness goes full retard. Let’s

see how the bid/offer spreads hold up at Coinexx today … I’m not hopeful.

And for the record, if you’re not a U.S. citizen or resident, oil trading doesn’t

get any better than at PLUS500 [ https://www.plus500.com/Instruments/CL ].

Directly below, the dashboard screenshot from earlier this morning.

click on box to enlarge

And, I might add, I believe this is without commissions … so, there isn’t

anything better at the moment in the world for oil than PLUS500 that I have

discovered. While they are at a 2 cent spread, Coinexx is at 4, Turnkey is at 6,

and LQDFX is at 15 cents [wait … wut? … seriously, what are these guys

smokin’?]. Problem is, PLUS500 doesn’t accept US clients, and they don’t

accept corporate accounts, only individuals … meh!

Again today we see very large ranges from Asia & Europe, where bid/offer

spreads last night were as high as 10 cents … good luck trading that … and

then we get to New York, and its “crickets” … WTF … another day as well

with disappointing spreads from Coinexx … haven’t seen 3 cents in over

3 days in the spread … as I told management this morning, “if PLUS500 can

do spreads in oil at 2 cents with no commissions, why the hell can’t you?

… so, what’s preventing you from signing on with their LP for oil? … what”?

One algorithm trade today, from the long side, and again it simply won’t

move a bit as the SP500 rallies, so I liquidated … bought at 33 sold at 35

… at least it wasn’t a loser, but not a very good risk / reward trade at all

… things today skewed mightily before trading even began in Chicago or

New York. Directly below the M5 for the trade [white arrow = buy, orange

arrow = sell liquidated].

click on chart to enlarge

What a volatile week in oil … would really help if we had access to

consistently decent spreads that aren’t jumping all over the place and

creating havoc … at this juncture, cuz most of us are US citizens, all we got

is Coinexx … I’ll keep looking and searching for other options, though, cuz

you never know. One more thing to add salt to the wound … PLUS500 also

has crude oil options … yea, I know … isn’t it great to live in a country

where you’re treated by the rest of the world as lepers … I can’t even

… I’m outta here early today … blog update on Sunday … until then mi

amigos … Onward & Upward!!

Have a great weekend everybody!

-vegas

UPDATE: 1 PM EST: Below, I’ve made a screenshot of PLUS500 oil, right
alongside Coinexx, so you can see firsthand the spread differential. If I could,
we’d be there!

click on to enlarge

UPDATE 2: 3 PM EST: It’s 3 PM EST on a Friday … do you know where your

oil market is? … well for most, you can’t trade it into the close cuz the spreads

have been blown out … not at PLUS500 … notice the difference now!

Good grief what a difference! … a real oil market!!

THE NEW PARADIGM: POLS & APPARATCHIKS

 

“Like if you’re long oil & then Trump says something … Oy!”  

And just like that, Trump becomes an oil analyst and crude tumbles … “as 

I’ve said before, it’s all Pol’s & Apparatchiks all the time, and nothing moves 

without ‘em … problem is twofold … 1) you can’t predict when they open their 

Pie Holes, and 2) markets move at the speed of light until “crickets”, where it 

then dies and goes sideways ‘till the next time”. And that’s all there is folks!

So, you either leave it alone, or buy the rally or sell the break … doing the 

later almost insures account destruction, so that leaves the former by default. 

Not really any good choices here.

Meanwhile, over in Europe & the U.K., they’ve fucked up “Brexit” so badly, 

nobody has any clue what’s going on, including those making policy … a 

third grade class of retarded kittens could do a better job of managing  

“Brexit”, which of course has paralyzed FX, cuz everybody has wised up 

and refuses to trade it anymore until it’s over … whenever that is … the end 

result being volatility has hit the wall and died for now.

Bottom line is, we end up with another “spoiled” day of trading … why? 

… cuz once the Pol [today it’s Trump, tomorrow it’s ?] or Apparatchik moves 

the market, it’s done for the day … most likely, nothing left but crumbs and 

the gnashing of teeth … and there isn’t a “Hoover Dam” thing we can do 

about it. Don’t want to sell it $1.80 lower into the hole and expect volatility to 

bail me out when there isn’t any … although longs are trapped some via 

positioning. And sure enough, “Thelma & Louise” she goes.

Until tomorrow … how frustrating, but whaddaya gonna do? … until 

tomorrow mi amigos … Onward & Upward!!

Have a great day everybody!
 

-vegas

OUR NADEX SIGNALS SERVICE IS UP & RUNNING … DAILY 

WTI CRUDE OIL SIGNALS & “VOLATILITY” STRATEGIES 

IN 20 OTHER MARKETS, INCLUDING COMMODITIES, FX, 

& STOCK INDICES! … “what on earth are you waiting for”?

A LESSON IN GAMMA

 

“Never ask an options trader what time it is!”  

I touched on the subject of Gamma yesterday, and it’s important everyone 

really understand what is at stake here … “anytime you’re trading any 

financial derivative that doesn’t go tick for tick with the underlying cash/spot 

market, it therefore has some element of “optionality” to it … meaning of 

course, it is subject to the whims of the 4 “Greeks” … i.e., Delta, Gamma, 

Theta, Vega … protest all you want, and if you ignore them it’s gonna cost you 

money”.

When utilizing the “synthetic Christmas tree strategy” [2X1] in trading 

GBPJPY and/or EURJPY, half of your position [the 2 lot side] is simply a 

“synthetic” LONG call or put, and all 4 “Greeks” play a role. To briefly 

summarize, Delta = rate of change of the call/put versus the underlying 

cash/spot of the futures contract … by definition the Delta = 0.50 when the 

strike price of the option [NADEX Call Spread floor or ceiling] = the price of 

the underlying instrument … Gamma is the rate of change of the Delta 

… Theta = time decay to expiration and plots the rate of evaporation of time 

premium to expiration … Vega = volatility increase/decrease as the 

underlying market trades and the impact on the option.

While all 4 play a role in our service signals recommendations in the volatile 

FX pairs of GBPJPY & EURJPY, the two most important are Theta & 

Gamma, where when Gamma dies and goes quiet, Theta definitely kicks in 

and it’s like watching ice melt on a sidewalk in the Summer. There are two 

types of Gamma, those who play the short Gamma game, hoping for time 

premium erosion that is guaranteed, and thus provides what appears on the 

surface of an argument to be the most logical strategy for profit, and those 

who are long Gamma, looking for a market to move and make them money.

And while nothing you do can guarantee winning trades 100% of the time, 

every “professional” out there who has written books on options, always says 

the same “Hoover Dam” thing, which is you want to be option sellers to be 

MAX profitable, meaning of course you are gonna be short Gamma. “Folks, I 

got a “bigly & yuge” problem with this approach, cuz at some point you’re gonna 

get caught short Gamma in a rip snorting move you can’t cover effectively, and 

when that happens, whether you realize it or not, your account is “buh bye” with 

losses that are eye watering to say the least … it’s not a function of “IF”, it’s a 

function of ‘WHEN”.

Over the course of my trading career, which spans many blue moons, the 

number of people carried out “toes up” from being short Gamma is 

astounding … the number from being long Gamma? … “crickets”! So, in 

order to help us achieve ultimate profitability & success, I choose those 

markets that have two [2] critically important criteria; 1) MAX consistent 

daily volatility and high daily ranges, and 2) premiums that are reasonable 

given the MAX volatility … right now, that would be EURJPY & GBPJPY 

… stock indices & crude oil fill criteria #1, but the premiums required to 

enter positions are insanely high, thus making them not good candidates at 

present … gold, if it could ever get up off its ass and actually start to trade 

again, has the potential to be like GBPJPY, but in its current state of lethargy 

& manipulation isn’t a good candidate either … other FX pairs are simply 

too inconsistent volatility wise and present more of a problem being long 

Gamma, to consistently be money makers.

Situational awareness also fits into the positional equation, and asking the 

important critical thinking questions before a position … last night I told 

signals service subscribers, that even though premiums for EURJPY & 

GBPJPY were incredibly cheap [the lowest seen in weeks], Friday’s present 

volatility problems in the new paradigm of trading … specifically, Friday’s 

have become “position squaring” day, and unless there is to be news or other 

political factors to be considered, Friday’s are not “moving days” for FX, and 

have a very high probability of being dead, so there isn’t gonna be a trade 

here … so why are market makers offering us “gifts” via low premiums on 

the open? … what do they know that most traders don’t? … “well, what they 

know as well as I know, is that Friday’s are roadkill for trading”! And as I 

write here early in the AM, it’s exactly that … nobody should be surprised by 

this, and premiums are indeed melting like ice on a sidewalk in Summer.

For those keeping score at home, directly below a table of key events in the 

“shitshow circus” a/k/a “Brexit”, with key events in the following days which 

will affect GBPUSD & GBPJPY.

 

click to enlarge

So, onto next week, and we’ll see what happens on the open Sunday night 

… blog update on sunday night as well … I’m outta here 

… Onward & Upward!!

Have a great weekend everybody!
 

-vegas

OUR NADEX SIGNALS SERVICE IS UP & RUNNING … DAILY 

WTI CRUDE OIL SIGNALS & “VOLATILITY” STRATEGIES 

IN 20 OTHER MARKETS, INCLUDING COMMODITIES, FX, 

& STOCK INDICES! … “what on earth are you waiting for”?