After last week’s big spike lower followed by a quick recovery, crude oil continues to hold the $46 level in the early going of today’s trading. With rig counts continuing to increase, demand down, and funds liquidating long positions, it is was not surprising to see crude fail to remain above the $50 level. The question now is, at what price will traders ultimately find value? If last week’s action is any indication, the answer appears to be in the $43.50-45 range. With crude already down over 14% in the last month and many technical indicators registering oversold readings, I can understand the desire to get long in that range or even up here. However, I do believe there are some good fundamentals behind the selloff, so I would consider covered calls to give yourself a bit of a downside cushion. I think there is probably a lid in the near term at or around that $50 level anyhow, so I’m not too worried about limiting upside profit potential. More conservative traders may even consider using the premium towards the purchase of protective put options. Traders should look to this afternoon’s private inventory data and tomorrow morning’s public numbers for direction, but I would recommend looking to take advantage of lower prices if we see them.