Selling naked puts and calls does carry risk and the brokers respond with relatively high margins but this can be managed by following a few rules. TDAmeritrade will let you trade all types of options in the same margin account, but their margins tend to be about as high as the other large brokers. I've been trading oil futures options for a few years and haven't had a margin call there but try to keep the total at around 50% of my account.

DeCarley Trading[/URL] is a boutique broker that seems to have lower margins and reduces them further after the initial trade. They also allow retirement accounts to be used for futures trading, which is rare. Carley Garner is great to work with and has written several helpful books on the subject. Margin goes up as volatility rises with abrupt market fluctuations, like in this week, and Carley will occasionally contact you to make adjustments that will lower their risk if things get out of hand.

While you can hedge by forming a spread and reduce the margin somewhat, it's more effective to create a strangle each month. If you open the month by selling Puts at a delta of around 10 when the oil market dips, you can then sell Calls when the price seems to peak without adding margin at all, as the risk can only run in one direction. Hedging with wings added to one or both sides (created by buying cheaper options further away from the money to form an iron condor for the month) will also control the risk. Both options will decay over time due to theta and can be closed as expiration nears.

Did you have any oil positions on over the past week? If so, how did they fair and did you make any adjustments?

Additionally, what do you think of CL going forward? Up 1.31% today, personally, I think it will recover most of the loses over the next two weeks.

I did have $66 Puts that I adjusted to $63 Puts early in the week and those got way too close to the money today! Luckily, oil has rebounded a bit so I think I'll be OK with a tolerable loss from the adjustment this month.

Predictions based on either fundamentals or technicals are always challenging, but I'd agree that CL will probably keep heading back up once the banking issues quiet down. The Fed rate announcement may cause a ripple. However, there's plenty of time left in the month to tinker.

Any hope for NG to rally beyond last year's highs?
Now that OPEC is limiting supply, will NG rally?
What would be some of the hidden variables for an amateur like me?

Any hope for NG to rally beyond last year's highs?
Now that OPEC is limiting supply, will NG rally?
What would be some of the hidden variables for an amateur like me?
Please comment.

Thanks
Bob

Gas in west Texas is selling for pennies... literally!

Can you elaborate?