Lately, it seemed to Jim Cramer that the crazy linkage between oil and stocks would last forever. Whenever oil would go up, the market would rally; whenever oil went down, stocks were crushed.
"That is lunacy, as I've said repeatedly, because the vast, vast majority of companies in the S&P actually benefit from cheaper crude." ~ Jim Cramer
Futures and Options Expiration Dates
Ten Years of Supply and Demand Tables
Government & Industry Report DatesRead More
This commodity trading newsletter was distributed to DeCarley brokerage clients on January 20th, 2016.
The basic definition of leverage is to use a financial tool or instrument to maximums the advantage of a speculative undertaking. A prominent example of investing on leverage is the purchase of a home with a minimal down payment. Although the buyer of the home is entitled to any price appreciation of the home, he is also subject to the pain of declining home values. Yet, his profits and losses in regard to the home value are exaggerated on a percentage basis because of a lack of true equity in the home. Simply put, if a home buyer puts ,000 toward a down payment for a 0,000 home, a 10% increase in the value of the home to 0,000 results in a 100% return to the home owner but a decline to 0,000 results in a 100% loss! It is easy to see how leverage can be either a very expensive, or very lucrative, venture.Read More
Emailed to our clients 12/07/2015
As much as crude oil is an OPEC cartel story, or lack thereof lately; it is mostly a currency story. In the midst of fundamental supply glut headlines, it is easy to dismiss the fact that crude oil is priced in U.S. dollars and its worth is highly sensitive to changes in the FOREX markets. Yet, in my opinion, currency valuation is the single most influential aspect in oil pricing.Read More
Did the stock market finally decouple from crude oil futures?
**This was emailed to clients on 01/27/2016**
For as long as we can remember, the stock market and WTI crude oil futures have been moving in a positively correlated manner. This bucks conventional Main Street wisdom that suggests lower oil prices are good for the economy because it immediately increases the discretionary spending budget of most Americans. But in a post shale fracking boom, we are finding that the U.S. economy has largely benefited from the domestic oil boom…and now it must suffer from the bust.Read More
Traders spend countless hours paper trading, studying charts and dissecting fundamentals but they often fail to prepare themselves for 90% of the challenge...emotion. DeCarley Trading believes that success is only minimally determined by strategy and knowledge. As a result, it is critical to be aware of the potential emotional obstacles that come with active trading, attempt to prevent them, identify them when they arrive, and behave accordingly. Join us for a discussion on effectively managing emotions before, during and after a trade.Read More
I’ve been a commodity broker since 2004. Throughout that time we’ve seen massive shifts in the manner retail traders execute orders in the futures and options markets, but more importantly we’ve seen transaction costs plummet due to massive improvements in execution efficiency.Read More
The Commodity Futures Trading Commission issues a weekly report outlining the aggregate position of traders in three major categories; hedgers, large speculators, and small speculators. We believe that the report, known as the Commitments of Traders, offers traders a wealth of information that might be helpful in predicting future commodity market movement.Read More
Nevertheless, there are some compelling arguments to suggest that option sellers face favorable odds of success over option buyers, or outright futures traders. But, even putting the odds in your favor doesn’t guarantee a favorable outcome. Here are some aspects of option selling that should be considered before employing a premium collection strategy.Read More
The truth is, unlike margin on futures contracts, option margin is dynamic. It is almost constantly changing along with market price, volatility, and the exchange’s perceived event risk. Further, many brokerage firms opt to charge their clients margin requirements that are higher than the exchange minimums to compensate for what they believe to be additional risk posed to the client, and more importantly themselves. Accordingly, one will probably never fully understand option margin but it is worthwhile to be aware of the basics to ensure proper strategy development and implementation.Read More
The practice of option selling is a controversial strategy for commodity option traders to partake in. Many brokerage firms outright forbid the practice; others allow it, but there are often strings attached. However, there are a limited number of brokerage services that recognize despite the challenges of option selling, it likely offers the highest long-term prospects for successful trading. Accordingly, such brokers give their clients the freedom to implement a short option strategy. We are a part of the minority commodity brokers that believe our clients should be given the opportunity to sell options without hassle. Nevertheless, option selling is far from an “easy-money” venture; there is a reason many brokerage firms shy away from option selling.Read More