What can we tell about the market by looking at option strikes ranked by open interest? Below is a snapshot of the top 20 strikes, puts and calls… We see that the number on strike is the Dec 100c which accumulated much of its open interest in 1Q21! Next is the Dec 150c which is part of a 149/150 call spread as well as trading on its own… The Dec22 200c and 250c are both in the top ten, probably initiated singularly but maybe as spreads, too… But note the top put: Dec22 $60p with the 50p and 40p in second and third… These were likely producer hedges put on a while ago… But is there no new widespread producer hedging going on? Are high prices, a backwardated market the cause? The contrarian piece that sticks out, or the trade that is missing is deep out of the money put buying by speculators and new producer put buying… This is only WTI, of course, does not include Brent options…
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