Trade of the Week: Crude Oil | Investors Alley

Trade of the Week: Crude Oil

March 31, 2020 6:15 am by Jay Soloff

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One of the secondary reasons for the market crash (after COVID-19) has been the extreme selloff in the price of oil. Crude oil has dropped to around $20 a barrel for the first time since 2002 due to a price war between Russia and Saudi Arabia.

One popular method for trading crude oil is United States Oil ETF (USO), which has dropped all the way down to about $4.50 per share. Some trader or fund is taking advantage of the low price by using very long-term options, all the way out to January 2022.

The trade involves selling puts to help finance calls, which makes a lot of sense given how low the price of USO is.

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