The details of this trade are as follows:
OVX is up, there are tensions between Saudi Arabia and Iran. They have severed diplomatic ties. Unless there is some sort of supply disruption, this is actually bearish, since it’ll cause increased production from Iran and the Saudis.
OVX jumped back above 50 again, so I think this is a good time to open the trade, especially since the DTE is ideal as well. $31 is below the 2008 crisis lows, and $49 is very far away, so my strangle is pretty “safe”, or at least as safe as a strangle can be.
The oil glut is still strong, and some say the spring refinery maintenance season will bring new lows. We’ll see. Again, my position size is small, so I can manage the trade if needed, without worrying about an increased position size.