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The play is to initiate a bull put spread on USO – BE at 50% FR of the last significant down move.
Short 10 Oct 35 PUTS
Long 10 Oct 34 PUTS
Credit = $350
Max Loss = $650
BE = 34.65
Adjust the number of contracts depending on the investment amount.
Look to make 10%-15% of margin ($650). Look to close the spread or adjust if price touches the short strike.
Possible adjustments include rolling down (lower strikes)/out (next month) the spread. This will decrease the profit margin. Alternatively covert the spread to a butterfly, by opening a bear put spread (Log Oct 36 PUTS, short Oct 35 PUTS). This will narrow the profit range, but will significantly cut down the max loss while increasing max profit.