Global Oil Prices Jump, June OTM Calls still alive…

May 15, 2017 by Jim Colburn Leave a Comment

Oil prices are moving sharply higher… Here is the chart from barchart.com:

And from the WSJ, here is why:

“In a joint statement Monday, Saudi Energy Minister Khalid al-Falih and Russian Energy Minister Alexander Novak said a pact by the Organization of the Petroleum Exporting Countries and external producers such as Russia to cut output and bring down global oil inventories should be extended to the end of March 2018.”

Expiring on May 17th, some June out of the money calls given up for dead are now very alive… June 50 calls which have 47,576 contracts open should be very active today… June $55 calls have a whopping 109,775 contracts open! While it’s a long shot that these go in the money before Wednesday afternoon’s expiration, this is oil… And from a risk perspective, something that measures almost zero risk switches into a futures contract, making life difficult for the option seller…

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