Opened SCO covered put (7/22 expiration, $187.50 strike)
Sold to open 200 shares of SCO for $87.68, and sold to open 2 put contracts with $187.50 strike price expiring 7/22 for $3.10. Total proceeds after commission are $18,138.60, or $90.69/share.
There’s been a disconnect between the equities market and crude oil over the past couple of weeks. While equities were rallying, crude oil is continuing to languish. I expect that the positive correlation between those will reassert itself. I also expect that the recent dollar strength will start to drain away, as interest rates in Europe start to increase. But, while that is my directional bias, at the end of the day, this trade is about harvesting volatility, and harvesting the inevitable decay of a levered ETF.