Could This Oil Name Make A Massive Move?

[Image] What If You Could Get Trader Like Returns From A Buy and Hold Portfolio? [Image]( It’s Not Only Possible But Tonight At 8 PM ET You’ll Learn How [Reserve Your Seat]( Hello trader, Yesterday we saw an unprecedented plummet in crude oil futures. The crude oil futures contracts that expired yesterday settled at -$37.63 per barrel. You read that right… those futures prices closed at negative territory. It’s something even the Wall Street veterans are scratching their heads and wondering about. Why did that happen? My Take On Negative Crude Oil Prices Well, those futures contracts were thinly traded and were set to expire. My take is that there is little to no demand for oil right now due to the coronavirus pandemic… so much so that a buyer of those contracts would have to pay someone to take the barrels of oil off their hands. That’s a signal to me that there is very little storage capacity out there as the glut of crude oil continues to rise. Not only that but negative oil prices cast a foreboding stormcloud that the coronavirus has damaged the economy. Of course, low crude oil prices would benefit consumers… but who’s really even driving a lot these days, minus the essential workforce? What I really think happened with oil prices yesterday was a “long squeeze”. Basically, the buyers of those contracts scrambled to get out because they didn’t want to take delivery of crude oil… so they just sold at any price they could get, leading to negative prices. What I Can Do With That Information Of course, you’re probably wondering, “Kyle, what does this all mean and how is it applicable to your trading?” Well, one piece of the puzzle is put together… but in order to [take advantage of this, I would need to find a potential play.]( For me, I love to look to my [Dollar Ace strategy]( to try to figure out where the smart money is placing their bets. One trade that came across my screen was a $461K bet in Energy Transfer LP (ET) — a diversified midstream energy company that transports, stores, and terminals oil and gas products. Why was this trade so interesting to me? Well, someone came in and purchase 2,000 July 20 $4 calls for about $2.30 per contract, when the stock price was around $6 a share. In other words, those were deep in-the-money (ITM) calls. [Why would someone buy the call options instead of buying shares of the stock outright?]( Leverage because they would’ve had to pay $1.2M to buy 200K shares of ET outright, but by purchasing those call options… they only had to pay a fraction of that, just $461K. Could the trader be looking for a massive move in ET… or do they know something that everyday traders don’t? Who knows… and only time will tell. There is an interesting chart setup in ET right now. If you look at the daily chart below ET, there’s a bull flag formation. [Image] From my experience, stocks typically breakout when it forms this pattern… and right now, there’s room all the way to about $8.50, and if ET breaks above that, it could potentially fill the gap. The thing is… I didn’t take this trade. Why? It simply didn’t fit into my trading system, but I found this setup so interesting that I needed to share it with someone. My trading system focuses on buying out-of-the-money (OTM) options that may look like wild bets to the untrained eye. [More specifically, I want to look for options priced under $1 that are set to expire worthless, unless there’s a catalyst.]( Of course, I could talk about how I’ve made a small fortune using my Dollar Ace trading system… However, I believe it can be more beneficial if I teach you how to find these trades, as I reveal in my [Dollar Ace Masterclass.]( [I believe it can open you up to a whole new world of trading opportunities.]( [Image] Kyle Dennis The People's Trader Remove me from Biotech Breakouts Free Newsletter [Click here to unsubscribe and stop receiving exclusive emails from kyle@biotechbreakouts.com]( Neither Kyle Dennis nor RagingBull.com, LLC (publisher of BiotechBreakouts) is registered as an investment adviser nor a broker/dealer with either the U. S. Securities & Exchange Commission or any state securities regulatory authority. 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