Trading energy options to many might appear to be a risky venture, especially in the volatile energy complex. To cash in, you not only need to guess correctly on the strike price, you also need to guess correctly on the time frame of when the strike will be hit. Therefore, even the most saviest of traders prefer to use options as insurance protection for their long or short futures contract positions. Fortunately for energy bulls, because of the European Union willingness to backstop Greecian economic turmoil, a political put is already in place protecting downside risk to long positions.
Similar to the famous Bernanke put for long equity postions in the United States, where traders can rest assured that the Federal Open Market Committee will adjust interest rates to buoy any sinking stock market, the European Union put is firmly in place as long as the EU decides to allow countries to remain in the EU despite not meeting debt to GDP ratio guidelines.
The weeks to come are sure to be filled with violent clashes between the Greek government and its unions. The euro likely to rise and fall just as violently, moving the energy complex up and down as well. Bulls will be waiting with ready cash on the violent dips lower and cashing out on the violent rips higher.
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