Far out Crude Oil Options....

[OBWON]

I'm new to this site, but not to trading... I've been on the sidelines for the last 20 years.

Things sure are a lot more complicated... can't even trust the fundamentals anymore..

...Anyway, I'm planning on purchasing some crude oil options that are way-out in the future (2 - 3 years) and just sitting on them. I'm not concerned with near term liquidity. I've noticed that that there's open interest on some of these far-out options, but no volume... what gives with this...??

...Also, whom would you recommend to execute these trades..??

Any info / thots would be appreciated...

...jAke

 

[Rhody Trader]

...Anyway, I'm planning on purchasing some crude oil options that are way-out in the future (2 - 3 years) and just sitting on them. I'm not concerned with near term liquidity. I've noticed that that there's open interest on some of these far-out options, but no volume... what gives with this...??

All it takes is one random trade to create open interest (kind of like you buying some far out options). I'm not surprised to hear there is little to no volume on a day-to-day basis. What it means, though, is that the spread on any quote you get is likely to be quite wide.

...Also, whom would you recommend to execute these trades..??

Any of the many reputable (and solvent) futures brokers will suffice.

Keep in mind that there's a massive spread between the price of the nearby contract and those far out - like $20+. Also realize that implied vol is running pretty high. Check what the break-even is going to look vs. where you think prices are going to be to make sure it's worth taking the position.