OptionSellers.com

Good afternoon, this is James Cordier of OptionSellers.com with a market update for July 2nd. Well, with the first half of 2018 now in the books we start looking forward to the 3rd and 4th quarter of what has been a very loud economic market. Talks of tariffs in China and interest rates, inflation finally beginning; however, many commodity prices basically in a sideways trading fashion. Who in the world would think that the gold market would make a very strong move earlier this year with North Korea and the United States trying to draw battle lines. Interest rates negative in Europe and, of course, what’s always going on in China and now tariffs. We took a speculative move thinking that commodities, especially precious metals, would probably start languishing and going into a sideways fashion.

So far this year, that’s exactly what has happened. Silver has traded in approximately a $1 trading range, gold has traded in approximately $80-$85 trading range for the first 6 months of the year. To watch some of the business shows, you would think that those had made large moves, but actually that’s just a lot of noise and a lot of headlines, which, of course, plays into our hands. A lot of discussion about China, interest rates, and inflation cause a lot of investors to buy options and, if we’re following along correctly, quite often the fundamentals don’t justify a big move, and then you sell calls much above the market and puts much below the market, and certainly that has worked out quite well so far in 2018. The new market that is now possibly heading into a consolidated type would be crude oil.

The crude oil market has had dramatic moves over the last 24 months. Right now, we feel that that could be turning into a sideways market, as well. Both Russia and Saudi Arabia recently have discussed and arranged to increase production somewhat going forward. Clearly oil, which has increased now some $10-$15 a barrel over the last 6 months, is probably going to start pinching some of the economies around the world. If you were to look at Germany, for instance, they have some of the most negative business ideas right now going forward. We still have negative rates in Europe and, of course, China this past week entered what’s called the bear market where their stock market is down over 20% from its high. High energy prices during times of weaker economies around the world is probably not going to sit very well.

Russia, Saudi Arabia, some of the largest oil producers, they know that and they don’t need to be greedy right now. They have produced oil for $35-$40 a barrel and trying to push it above $80 and turn some economies into recessions. That certainly is not their idea. We think that oil is probably going to start settling into a $10 trading range, Brent probably in the 70’s, and WTI in the 60’s. We think that putting a $50 strangle around crude oil right now is an excellent idea, similar to what we did in the precious metals earlier this year. We think both of those positions are going to continue to bear fruit in the last half of 2018. We will just have to wait and see.

Anyone wanting more information from OptionSellers.com can visit our website. If you’re not already a client of ours and wish to become one, you can contact Rosemary at our headquarters in Tampa, Florida about possibly becoming one. As always, it’s a pleasure chatting with you and looking forward to doing so again in 2 weeks. Thank you.

TD Ameritrade: Cordier Gives New Oil Price Forecast

James Cordier

Ben: Welcome back to Futures with Ben Lichtenstein. Traders, with OPEC’s recent decision to increase production, crude has been the focus for many. To help us take a look at the recent price activity in the energy markets and the impact from the recent OPEC decision, traders, we’ve got James Cordier, the President and Founder of OptionSellers.com, joining us this morning. James, welcome to Futures with Ben Lichtenstein. Crude rallied on the news but no follow through. Does this point to the decision having already been priced into the market? For the most part, was this move expected?

James: Ben, it’s really interesting, the movement in crude oil after the announcement. I think what OPEC and, of course, plus Russia was trying to do was give a soft landing. I think they’re very familiar with the fact that oil prices can’t continue to escalate as many U.S. economies, as well as in China and Europe, are slowing. We have PMI in Russia and both China not doing so well. Of course, we have China down 25% from their recent high and a soft landing is very important. Needless to say, having the market just fall out of bed is now what they wanted either, so we had a very quick $8 decline in prices. We’ve now rallied back about half of that and it’s possible that we’ll fall into a nice equilibrium here with plenty of supply but not too much to cause prices to go higher.

Ben: Yeah, it looks like we have a bit of a range forming up above 64 and below 73. James, I’m wondering, how much of a boost in production is to slow the pace at which they’ve been reducing inventories, and how much is to combat the reductions in production that we’re seeing related to sanctions and issues in Venezuela, because the $1 million increase in production isn’t going to be enough to balance off both.

James: It’s really not. You can add Libya to that last, as well. The fact that we had over compliance coming into this meeting allows both Russia and Saudi Arabia to actually pump more than what the report came out here 3 days ago. The fact that we’re talking only 600,000 additional barrels, that is not going to be enough, you’re correct, to take care of what’s coming offline in both Iran, Venezuela, and in Libya; however, there is a lot of fudge room right now available. The fact that both Russia and Saudi Arabia now have the green light to pump more oil, I think we’re going to see in the 3rd and 4th quarter probably closer to an additional 1 million or 1.1 million barrels. The 600,000 that was announced is not enough to slow down this market.

Ben: Yeah, it seems to be the case. We’ve been hearing a little bit about distribution issues as far as the WTI production as it nears that 11 million barrels per day level. Is some of the narrowing that we’ve been seeing in the Brent/WTI spread related to the bottleneck that we’re seeing in distribution?

James: That’s exactly right. What’s going on right now in the United States is we do have a great deal of new supply coming on, but there is a bottleneck and it is allowing the Brent/WTI to narrow. I think we’ve seen that just recently and we’ll probably see it narrow another dollar or two in the next upcoming weeks.

Ben: James, talk to us a little bit about what’s going on here as far as what you’ve been seeing and hearing regarding Canadian oil sands and the outage. Is this impacting the spread or impacting price at all?

James: Not as of yet, but it’s very interesting, the price of oil coming up and then the Canadian dollar coming down recently is a really interesting conundrum there. What’s going on in the Canadian oil sands will come out to play in the next several weeks. There hasn’t really been a big market moving affect there yet, but that will be coming up if it doesn’t get straightened out soon, I think.

Ben: James, I’m curious because everyone’s joking about OPEC plus one right now, meaning that Russia seems (continued)

July 2018 Podcast

James Cordier and Michael Gross

Michael: Hello everybody. This is Michael Gross of OptionSellers.com. I am here for your July Podcast. This month’s podcast will be in audio format. I’m here with head trader James Cordier. James, welcome to the show.

James: Thank you very much, Michael. Always happy.

Michael: Great. The topic of this month’s podcast is Fast Cash from Selling Options in Over-Bought or Over-Sold Markets. James, as you and I know, we’re not really in the business of looking for fast cash, but we’re more in the business of long-term investments. Every once in a while, when you’re selling options, there comes certain opportunities where there might be a place to sell the option and you see that time decay in just the first 30-60 days. Often times that can be when markets get to an extreme, like some markets we’re seeing now. Wouldn’t you agree with that?

James: Michael, it’s interesting, we are very long-term investors. When we’re looking at seasonal positions or headlines that create a slightly shorter-term opportunity, then we do look at things like timing and certainly all the headlines going on right now with trade are probably offering some really good opportunities of the slightly shorter variety and we’re looking forward to taking advantage of those over the next 10 days or so.

Michael: Great. I know, as you and I have been discussing, as are most investors right now, the big topic is trade tensions with China. I don’t know if we call it a trade war yet, but certainly having got some investors attention and pushing the stock market around. Maybe talk a little bit about how that’s affecting commodities right now.

James: Michael, if this doesn’t turn into a trade war, this is the most well played game that I’ve ever seen between the U.S. and China. I mean, we are right to the brink of what could be quite a significant trade policy coming down the pike. It is definitely worrying some investors that are looking at certain parts of the global economy. Uncertainty is always not welcome. Anyone who is looking at investing for their company or inventories or what have you, when they see uncertainty they usually hold back and that is probably going to be swelling some economic growth globally if this doesn’t come to a head here in the next week or two.

Michael: Okay. As most of you listeners know, as far as being an option seller, it doesn’t really matter to you which way the market or prices are moving, especially when you’re trading different uncorrelated commodities. Often times, situations like this can create opportunities and that’s what we’re going to talk a little bit about today. James, would you like to go ahead and move into our feature markets?

James: Michael, certainly. Natural gas is one of the markets that are very near and dear to our hearts. In the very heart of winter and the very heart of summer, which is coming up relatively soon, we did take positions in natural gas much earlier this year, trying to sell put premium. We were fairly successful doing that. Generally, the market bottoms in winter and rallies into spring and the natural gas market did that. Right now, we are looking at a seasonality for natural gas. It has had a very nice rally over the last 3 months or so and basically a lot of headlines talk about the need for natural gas in summer for cooling homes and cooling businesses, of course. We think that’s quite overplayed. Generally speaking, when it’s extremely cold in the U.S. or throughout Europe, demand for natural gas does spike and that is real. As far as buying natural gas for summer cooling, I don’t think the numbers dive exactly. It takes approximately 25% of the natural gas to cool a home in the summer as it does to heat a home in the winter so, generally speaking, when natural gas rallies because the warmer temperatures are ahead, that’s usually something you want to fade. Of course, at that time, inventories are usually b(continued)

Good afternoon. This is James Cordier of OptionSellers.com with a market update for June 1st. Well, lo and behold, CNBC, Bloomberg TV, and Fox Business are, once again, talking about Greek bonds, Italian bonds, and Spanish debt. Once again, Europe is smack dab in the middle of the radar screen. It’s so interesting that after practically 10 years of quantitative easing through the Euro zone, their economies still are struggling to get their heads above water. Some nations still have negative interest rates. Here we are, looking at some of the German economic numbers, consumer confidence is falling dramatically, PMIs throughout all the nations in Europe are doing basically a swan dive at a time where you would think of 8 or 9 years of quantitative easing they would really be forging ahead. It doesn’t seem to be the case.

That could be the reason we’ve had $80 crude oil and, of course, all of Europe needs to import energy from other nations. $80 oil, of course, is quite a tax on the consumer and, of course, industries as well. What is this doing? This is probably slowing the global economy both here in the United States as well as in Asia. It’s just the first glimpses of it. It doesn’t appear to be a slowdown here yet, though we do seem to be in a bit of a stall speed in the U.S. and some of the foreign nations. Of course, interest rates in the United States are ticking up, approximately every 3 months. Whether they raise rates this year 3 or 4 times doesn’t really matter that much. It is underpinning the U.S. dollar and what that’s doing for us is providing a very stable commodities market. As clients, you all know we have many positions on. Where we’re actually predicting stable market prices.

Identifying fairly value markets in gold, silver, crude oil, coffee, soybeans can be a great mainstay for option selling. Of course, as you know, we have $800-$900 strangles around gold. Gold over the last 6 months has barely budged. The silver market so far this year has been lopped into a $1 an ounce trading range. We have approximately an $18 strangle around that market. We really do like the idea of a strong U.S. dollar throughout the rest of the year, and that’s creating very stable commodity prices which, I think, is going to be very fruitful going into the 3rd and 4th quarter of this year.

One market that’s finally coming around is the coffee market. We do have a trucker strike in Brazil and that is keeping some of the coffee off of the market. Of course, investors and speculators are racing in to buy coffee. We love the idea of selling coffee calls above $2 for later this year and early 2019 expiration. We think that’s going to be a great idea and we expect coffee prices to be half of the strikes that we’re selling right now. Our old friend coffee is becoming what I think is going to be a very good opportunity going forward. We’ll just have to wait and see.

Anyone wanting more information from OptionSellers.com can visit our website. If you’re not already a client of ours and wish to become one, you can contact our headquarters in Tampa, Florida about possibly becoming one. As always, it’s a pleasure chatting with you and looking forward to doing so again in 2 weeks. Thank you.

Ben Lichtenstein: We’ve got a real treat here for you this morning, traders. We’ve got the founder and head trader of OptionSellers.com. Traders, we’ve got James Cordier with us this morning. James, welcome to Futures with Lichtenstein & Hincks. It’s a pleasure to have you on the show. I want to dive right into it. When we’re talking futures versus options I kind of think of it as futures for me are kind of easy versus options. It’s sort of like driving a VW versus flying a Cessna. Talk to us about some of the benefits of trading options and why they’re appealing to you, considering what we’re seeing here in the energy markets as of recent.

James: You know, I think that’s a great question. So often, people talk about options and they kind of go like this. I understand they are puts and calls, but I think the gentleman you had on just a moment ago is just a great example as to why selling options can be a good idea for mainstream investors. The gentleman prior to me was talking about trading in currencies and he talked about close stops and you’ve got to watch your lows and watch your highs, and you need to have a close stop on all of your positions. Shorting options and selling premium is just the opposite of this. If you want to take a long-term fundamental view on gold, as you’d just been describing, or crude oil, this is the way to do it because perfect timing, I’ve been in this business for almost 30 years, I don’t know anyone who knows how to do that… not on a consistent basis; however, we’re looking at energy prices right now. The crude oil market is extremely frothy, especially with slowing global growth. Europe right now is probably what brings us to mind right now, as far as the oil price, might be at a reflection point. With PMIs going south, with consumer confidence in Germany, I was just in both Italy and Germany this past week and, while pizza sales were really good, and I can attest to that, the rest of the economies are not doing so well. $80 and $82 oil Brent is going to probably be very detrimental to European economies. We’re looking at a possible reflection point right now in crude oil. Instead of trying to pick the exact copy, because of course no one else is of course able to do that, we’re going to start looking at selling a call premium on crude oil. We’re going to go out 3 months, 6 months, 9 months, sell the $90 calls and the $95 calls and that way we don’t need perfect timing, but we simply need to be right the market eventually. A lot of the fundamentals we’re seeing in oil going forward into the 3rd and 4th quarter lead us to believe that we’re going to be right on this.

Kevin Hincks: Good morning, James. Thanks for coming on the show. It’s always a pleasure for me to talk about options when I’m on this show. I spent most of my career doing that. So, you are talking about the 90 calls above the market, right? Selling something very safely above the market here, about $18-$19. You also talk about selling the 45 put so you’re creating a short option strangle, right? Where you basically want a range-bound trade in between your strikes. Now, the question that option traders have is, “Do you think, based on the risk that you’re assuming, now you’ve given yourself a nice wide in between the navigational beacons, I call it, of your short strikes. Are you getting paid enough for the risk that you’re putting on?”

James: That is such a great question. So many of your investors, I’m sure, are familiar with selling options on stocks. I hear about this all the time. When we have a new investor they’ll say, “James, I was introduced to short options through my stock broker. We started writing covered calls and then I got a little creative and started selling options on stocks. I hear that you’re selling options 2%, 3%, 5% out-of-the-money.” In commodities, crude oil, gold, coffee, we’re selling options 50-60% out-of-the-money in some cases. When we’re identifying a strangle, the window is just(continued)

Michael: Hello everyone and welcome to your June edition of the Option Seller Podcast. This is Michael Gross of OptionSellers.com. I’m here with head trader James Cordier. James, a lot of talk this month about bull market in commodities. It’s been getting a lot of media attention, obviously crude oil has been leading the charge, but what are your thoughts on that? Are we in a bull market right now or is it just speculation?

James: You know, most often, Michael, at the 3rd and 4th and 5th year of an expansion economically is usually when prices of commodities start going up. There’s usually a glut of commodities during a recession. As years go by, a lot of the excess commodities are then purchased and consumed, and usually that is when you start normally getting higher prices. I do believe we’re in a bull market in commodities. It is lead by energies, which of course was pretty much facilitated through OPEC cuts in production, but let’s face it, practically everything comes from a barrel of oil. Whether it’s cotton or soybeans or coffee or what have you, everything derives off of a barrel of oil or a gallon of gasoline. Of course, energy prices have really risen quite a bit over the last 18 months. That leads us to believe we are in a bull market in many commodities. There are 1 or 2 that have certainly oversupply in them, but the commodity market has been in a nice uptrend. Usually, this does happen 3 or 4 years after the beginning of an expansion and its kind of textbook so far.

Michael: So, we have oil markets possibly leading the charge here. Some of the grains have been aided by some weather issues. Do you see this spreading to all commodities or is it primarily limited to a few sectors?

James: I think it’s limited to a few sectors. If you look at the price of sugar or coffee, we’ve got just massive production expected in South America this year. The coffee market recently hit a 12 month low, the sugar market recently hit a 12 month low, so it is really a market that needs to be picked, if you will, to be in a bull market. A lot of commodities do have up trends, but some of the major commodities that we follow are over supplied. I think that’s why we really enjoy doing what we do best, and that is analyzing fundamentals on the different markets, simply buying a basket of commodities or selling a basket of commodities. I think you can be more sophisticated than that, and that’s what we try and do here, of course.

Michael: Yeah, in the media they like to get a story line, “Bull Market in Commodities” and that’s what they tag and they really maybe only focusing, as you said, on a few markets, some of the other markets. That’s why you get that play within the commodities where they’re not really as correlated to each other as maybe stocks.

James: Certainly not. That’s where diversification comes in. If you’re long or short the stock market, basically you’re living or dying by if it goes up or down. Of course, in commodities, we follow 4 different sectors about 10 different specific commodities and they really do have their own individual fundamentals, and that’s what makes following the same commodities for so long very prosperous, because you do get to know them. They all do have personalities. You don’t simply buy a basket of commodities like you do stocks. It’s different than that.

Michael: So, the person watching at home now and they’re saying “boy, it’s a bull market in commodities. This must be a good time to sell options”… that’s really kind of irrelevant if you’re an option seller, isn’t it?

James: You know, the interesting commodities, I think, is what bodes well for us. Whether you’re selling options on your own or you’re doing it with ourselves, it does increase premiums of options on both puts and calls. Certainly, the interest by the speculator, whether it’s a bank in London or whether it’s a hedge fund somewhere in San Francisco, it does increase the value of the options. If you(continued)

Good afternoon. This is James Cordier of OptionSellers.com with a market update for May 5th. Well, we are starting to receive some very interesting economic data just recently. Not so much here in the United States, but definitely in the EU. Both German and Great Britain numbers recently are really showing some signs of slowing. It’s very interesting that with quantitative easing still in place throughout the European Union we have slowing already in some of the main economies, namely Germany.

Here in the United States we still do have a fairly robust recovery developing. While there are some economic numbers here showing that it’s not taking off to a great extent, it’s still on firm footing. This has created a much stronger U.S. Dollar just recently. Which has brought a lot of commodity prices back into check. Earlier this year, we were having fears of the U.S. Dollar falling in value and investors rushing into precious metals, gold, silver, platinum, and the like, and as the U.S. Dollar now becomes “King Dollar” once again gold prices and silver prices have backed off markedly. What’s so interesting is if quantitative easing is still in place throughout the European Union, how is that area slowing already? That certainly is a big point for us looking forward to help decide economic growth. Globally, in China of course we have tariff talk, not that tariffs are going to necessarily take place to a great extent but, what that often does is it creates anxiety amongst major players and I think that’s what’s going on in Europe right now.

We do see decent demand for commodities going forward. The energy patch continues to be relatively strong but we do see that plateauing as well later in the summer. June, July, and August is often the high for demand in energy across the United States and we see that possibly slowing this big rally that we’ve seen in crude oil recently. We love the idea of putting a very large strangle around crude oil prices. We have a nearly fifty dollar strangle around that market. We think that’s going to be an excellent opportunity going forward and we have sales in precious metals some fifty, sixty, and seventy percent above current prices. With a strong dollar, we think that’s going to be an excellent way to go into the last half of 2018. We will just have to wait and see. We really like the way portfolios are positioned right now. We did a lot of rebalancing over the first quarter and a half and we think that we’re going to be bearing fruit here going forward over the next six months.

Anyone wanting more information from OptionSellers.com can visit our website. If you’re not already a customer of ours and would like to become one, you can certainly visit our website or contact Rosemary about possibly becoming a client if you wish. As always, it’s a pleasure chatting with you and looking forward to doing so again in two weeks. Thank you.

Michael: Hello everybody. This is Michael Gross of OptionSellers.com. I’m here with head trader James Cordier. We are here for your monthly May video podcast from OptionSellers.com. James, welcome to the monthly show.

James: Thank you, Michael. Can you believe we’re going into May already?

Michael: It sure went fast. This last month here we saw some key developments in the markets. We have a lot of tensions between China and the U.S. over trade, and then we’re, lately, looking at 10-year treasuries going over 3%. A lot of people are wondering how this may affect commodities. What’s your take on that?

James: Well, the trade wars that are supposedly about to take place, I think, are simply negotiation. President Trump mentioned many times going into the election that he was going to do “the art of the deal” and get us some more fair playing field, especially with China. Certainly the deficit that many goes out to China and doesn’t come back is something that he’s going to work on and, I believe, it’s more negotiating than it’s actually going to be major changes, as far as trade tariffs and such. Will some be put in place and some enacted? Probably so, but I know Mr. Mnuchin is going to China I believe in the next week or two, and he’s going to have probably the checkbook ready so he can basically get an olive branch going out. Needless to say, everybody wants a strong economic global growth and a trade war is not going to help that; however, getting a more fair and balanced trade, especially with China, I think is a really good idea and I think that’s what we’re going to get over the next month or two. All the discussion about it, I think, is going to be more of just that: just discussion.

Michael: So, you don’t see any major changes in any commodities in the immediate term? Any immediate strategies people should be doing right now or as a result of that or, primarily, do you just see things leveling out here?

James: Michael, the discussion of a trade war, like in soybeans or something that’s going to affect the demand for oil, I think a person or an investor should use that to look at the idea that it’s going to be settled. It’s not going to be a large disruption to production or demand in any of these commodities. When the price of a commodity is affected by discussion of it, I think you should take advantage of that. 3-6 months later, the fundamentals that we see now are going to be in place then, and basically it was hype that was going on and I think it’s going to offer opportunities. For markets that you’re following, if there’s trade discussion that’s going to move up or down the market that you were hoping to sell either puts or calls on, I think that’s going to be great picking in order to do that.

Michael: Okay. Well, for those of you watching, we have an exciting show for you ahead this month. We’re going to be addressing a very common question we get. A lot of times, people sell an option, they get into the trade, the option moves a little bit against them, and then the question is “Well, what do I do now? Do I adjust the trade? Do I get out of it? If so, where do I get out of it?” What we’re going to do this month is we’re actually going to take you into some of our real trades we are doing in portfolios. Some of these, you’ve probably seen us talk about before. Pull back the curtain a little bit and show you a risk-parameter we might use and then recommend something you can use at home, as well, if you’re trading on your own or just get a little bit better insight into how we might do it professionally. A good analogy, and, James, I know you can comment on this, is we all saw the incident with Southwest Airlines this month where they had the problem with the engine. Certainly a tragedy for the people involved that it effected; however, one thing that really stuck out to me is the pilots that landed that plane and saved all those people. Have you heard the transcripts? They’re just cool (continued)

Good afternoon. This is James Cordier of OptionSellers.com with a market update for April 20th. Well, a lot in the news lately concerning tariffs and a possible trade war with the likes of China, of all countries, the second largest economy in the world. The Trump administration, I think, is basically playing a game of chicken and getting them to lower tariffs in their country and getting more of a fair trade platform. I think everyone is pretty much in favor of that.

We’ve had a lot of questions recently… What would a trade tariff mean to some of the positions that we hold in commodities? Wouldn’t that be bearish for commodity prices? Good question. Over the last several weeks, there has been a lot of discussion about it and, primarily, soybeans are one of the target commodities that a lot of people are discussing. A tariff against soybeans and putting a premium on them would probably be negative to prices here in the United States and probably neutral to bullish in countries like Argentina and Brazil.

Our commodities that we trade here, of course, are on U.S. exchanges. We are actually positioned for soybeans to fall later on this year, so a tariff against soybeans would actually probably help our position there, so we’re certainly not too overly concerned about that, but we do watch and wonder what implications might mean to the different commodities and we’re certainly abreast of that. Quite often, a lot of investors look around the country for different aspects of what can move the markets.

Interestingly, right now is the incredible snow and rain in the northern parts of the United States right now. Generally speaking, that will be bullish for large prospect for corn and soybean harvests later this year. So, as we are hoping for a very large crop in soybeans, some October-November of this year, and lower prices, which would actually profit our accounts, our hats are off to those of you in the northern United States bearing the cold and the wind and the rain and the snow. That is helping all of our accounts later on this year.

So, for those of us around the world and in the southern half of the United States, our hats are off to you. Thank you very much. We do anticipate that actually helping our accounts later on this year. That should be a nice addition to the strangles that we’ve applied recently in silver, some $13-$14 around the price of silver, practically 100% of the underlining price. In crude oil, we’re looking at strangles of $52 and $53 wide on barrels that are now worth $60. Basically, we’ve been reloading accounts after a really nice 2017. We’ve spent the last 90 days positioning in markets like that with what we think are going to be great opportunities that will certainly be bearing fruit later this year. We’ll just have to wait and see.

Anyone wanting more information from OptionSellers.com can visit our website. If you’re not already a client and wish to become one, you can certainly contact Rosemary at our headquarters in Tampa, Florida about possibly becoming one. As always, it’s a pleasure chatting with you and look forward to doing so again in 2 weeks. Thank you.

Good afternoon. This is James Cordier of OptionSellers.com with a market update for March 30th. Well, when everyone first opened their account and we had a new account call, the two of us, three things were always discussed, and that is fundamental analysis that we do at our company. We are trying to analyze and discover commodities that are underpriced. Of course, in that case, what we would do is sell put premium. In cases of finding commodities that are overpriced, we are going to sell call premium, but the most important discovery of all is identifying markets that are fairly valued. That is truly our favorite positioning for adding premium and return to your account. Two weeks ago, we spoke about Goldilocks environment in commodity option selling and let me describe a little bit more what that is because we have identified and now have extremely high premium in three or four of those markets.

Gold, for instance, we have a situation in gold that it will probably be well supported because of financial activity around the world. We have very good buying of several commodities both in Europe and in Asia and a strong economy here in the United States. That will likely keep gold supported. At the same time, of course, when gold made its big run to nearly 2,000 several years ago, that was based on the idea of quantitative easing creating a great deal of inflation. What we have right now is quantitative tightening. We have a very strong global economy, which should keep gold prices supported and we have quantitative tightening right now for interest rates and money around the world, which should definitely keep a cap on any large rally on gold.

Imagine, if you will, in 2018 a $100 trading range for the gold market. That is what we see. We are also now looking at gold strangles that are $800 wide. There you are. Silver in 2018 having a $1.50-$2.00 trading range for the entire year and a $15 strangle around that market. Exactly. Crude oil. Fundamentals now are extremely supported because the United States is now exporting oil. At the same time, we’ll be producing 11-12 million barrels. That is also identifying a fairly valued market because the United States can now be the largest producer and, by quite some large number of barrels, oil should not run up to the 70’s or 80’s this year, we don’t think.

At the same time, the fact that the United States is now exporting oil, we don’t have the bottleneck happening in the Houston area, which used to bring oil prices down. We see oil in approximately a $10 trading range throughout the rest of 2018. We have just identified a $50 strangle around crude oil. So, when we talk about identifying fairly valued markets, that’s what we’re referring to, and that, I think, is going to offer great premium collection in 2018 and should be a very good return at the end of this year. We’ll just have to wait and see.

Anyone wanting more information from OptionSellers.com can visit our website. If you’re not already a client of ours and wish to become one, you can contact Rosemary at our headquarters in Tampa, FL about possibly becoming one. As always, it’s a pleasure chatting with you and looking forward to doing so again in two weeks. Thank you.