Oil Yolo – Closed out USO and BNO Calls and Went Into $107,340 Brent Futures Contract

Bit the bullet and took this oil yolo to the futures market. Closed out USO and BNO call option positions for a $14,800 gain year to date. Opened a 1,000 barrel brent oil futures contract for $107,340

I have been resisting this trade for a month because the smallest brent oil futures trade on Power*Etrade is 1,000 barrels, but this makes enough sense today. This yolo requires about $10,467 collateral, so it ties up a similar portion of my portfolio to 10 BNO or USO call options.

Etrade’s $.50 fee in and out per options contract was starting to add up. It’s not a lot of money, but a few hundred dollars a month less in fees is a welcome relief. I am still trading CVNA and LUV puts, but this one oil future contract at $1.5 in and $1.5 out can replace 100’s of USO and BNO options contracts.

WTI (USO) is trading higher than brent oil today, and even with the 3 week longer contract it shouldn’t be. Wti for May has surged and left Brent for June far behind, and my thesis that this conflict will last far longer than advertised the exact opposite should be happening.

West Texas is a landlocked oil barrel in booming Oklahoma and Brent is a water-ready barrel in the North Sea. Unfortunately BNO options were not capturing the major swings brent was displaying and had to be abandoned.

Positions and Disclosure: I am a retail trader and not an oil or financial professional. I hold 15x LUV weekly puts and 2 x CVNA weekly puts.

Bflo-Retail