Hopefully you have been following and were able to grab the USO trade we wrote up yesterday. It popped on the radar Monday morning as a way to generate income from the rising oil prices. But there was more to it than just jumping in. The trade is looking ripe and is already at a 60% gain but the key was picking the right oil ETF for this trade.

We looked at two choices and understanding the differences made the difference between a winner and a yawn. Here’s what happened:

We can see that after we targeted USO as a ticker to watch it jumped up Monday as we expected. That was our cue to grab the Oct 16 140 call for about 5.60. Today, it has gapped up again giving us a nice, quick payday with that call option already up to $9.20. If you haven’t already, strongly consider locking it it and taking the win. The climate around the conflict in Iran has had a tendancy to flip back around with the administration working hard to avoid oil at $100 per barrel. (take a look at an article on that here)

As we mentioned, picking USO as a trade candidate vs another oil ETF OIH helped boost this win. Here is the chart of what OIH did:

We can see that as we described on Monday that these two ETFs move a little different. OIH had the move up yesterday as well but has seen downward pressure today that sucked the profit out of a directional option like we chose for USO.

OIH tends to lag a bit so it may offer a trade. We’ll keep an eye on it and let you know.

Keep learning and trade wisely,

John Boyer

Editor

Market Wealth Daily

P.S.-This approach is very similar to what Ian Cooper uses in his Profit Beacon to add powerful signals to your charts. He explained it all here.