Spread options update… – Commodity Research Group

May 7, 2020 by Jim Colburn Leave a Comment

Do put/call ratios mean anything? Is the storage glut gone? 44,750 spread option calls traded yesterday (to 3,725 puts) led by a July/August20 to Jun/July21 +$.25 strip… Without knowing the motivation behind the trade, the buyer probably thinks WTI could go backwardated soon… And why not? June/July has rallied around $6 from a settled low of -$7.12 on April 21st… A contrarian might look at the put/call ratio, and the fact that more spread option calls traded than LO’s, or regular, flat price calls (37,228 of these traded) and conclude that the rally is overdone… Here is the CME’s excellent Most Active Strikes tool with a snapshot of yesterday’s activity…

Commodity Research Group (CRG), founded by veteran analyst Edward Meir, is an independent research consultancy specializing in base and precious metals, as well energy products. The Group provides research and general price analysis for these markets, along with advice to companies seeking to construct commodity hedging strategies.

Our associates bring decades of experience to the table, as they seek to help our clients understand the markets. CRG will distill the myriad of pricing variables mentioned above into coherent research that is to-the-point and tailored to a clients hedging or pricing needs. In addition, CRG is available for consulting assignments and speaking engagements. CRG does not manage money or trade for itself.

Reader Interactions

Leave a Reply Cancel reply