Risk Is Priced in Oil Market: Horwitz

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Sept. 20 (Bloomberg) -- Adam mesh Trading Group Chief Strategist Adam Horwitz discusses his play for oil with Alix Steel on Bloomberg Television's "Market Makers." (Source: Bloomberg)

What is your take on the market?

How much political risk is still in their?

I think all of the risk is in place and that is turning to come out now.

That is one of the reasons we want to put on the straight, because we see the risks coming out.

When the dollar got hammered the other day, that will probably have an effect.

What i want to do is sell the credit spread.

I want to sell the weekly, next friday's expiration.

The 38 call.

And i want to buy the 39 call to protect myself.

And i want to do that enough times at $1.44 of credit.

And i want to buy the november 30 eight put -- the november 38 put.

If the stock can sit here for the next five days, i own that put in november for free.

I'm still even on the trade.

And the bottom line is that maximum risk is three hundred $83 for the entire trade.

Oil has been very volatile.

It can go in any direction on any kind of headline out of syria or the middle east.

How are you factoring that in?

I think oil will not go higher than probably $109. which would accommodate about 82% move -- about a two percent move against the u.s. holding on interest rates, import costs are going to go down for emerging markets.

They can buy oil on the cheap.

The demand could have some upside.

I think there's plenty to be had.

And we are having a lot less demand here.

We are artificially inflated.

Gracias so much -- thanks so much.

This text has been automatically generated. It may not be 100% accurate.


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