The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.NEW YORK ( Top Gun Options) -- It would seem to the Top Gun Options trading team as if investors have factored in the current round of noise emanating from across the Atlantic. How else to explain the fact that, in spite of the news that Greece finally signed off on the latest round of bailout funds, all Wall Street could do was shrug and nudge higher by a couple of points? Follow TheStreet on Twitter and become a fan on Facebook. True, it was somewhat anticlimactic as the eurozone finance ministers approved over $170 billion in loans that would allow Athens to meet its latest round of debt obligations. There were few, if any, surprises in the agreement that requires Greece to comply with a new wave of austerity measures, including the promise to severely reduce its unwieldy debt-to-GDP ratio. The ratio currently sits at around 160%, and Greek leaders must somehow find a way to lower it to 120% by 2020.
A Look At the VIXThe Chicago Board Options Exchange Market Volatility Index ended the first trading day of this holiday-shortened week at 18.19, trading in a 10% range intraday. This reflected the uncertainty that remains even after the Greek bailout deal was completed on Tuesday. Remaining close to the bottom of its seven-month trading range, the VIX continues to provide traders and investors with a cost-effective volatility hedge.
On the Options FrontThe drama that continues around Iran has caused crude oil to spike above the $105 per barrel level, the highest rate it has been at in over nine months. At this point, speculators are apparently betting that the commotion around the threatened embargo will result in additional price increases on the international spot market for oil. Of course, any increase in acrimony between Iran and the European Union members will result in an additional rise in the cost of crude. Looking at a chart for the United States Oil Fund ( USO), it can be seen that its 50-day moving average should provide a reasonable level of support, at least in the short term. Here's a trade one may consider that will pay off as long as USO doesn't drop below 38.44 by March expiration.
- Sell 1 USO March 39 Put
- Buy 1 USO March 34 Put
- For a total credit of .55