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Upgrade to Premium YAHOO FINANCE ELECTION GUIDE What the 2024 campaign means for your wallet Oil Traders Hedge Against $100 Prices With US Election Underway
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Oil Traders Hedge Against $100 Prices With US Election Underway
Devika Krishna Kumar and Alex Longley Tue, Nov 5, 2024, 11:49 AM 1 min read
(Bloomberg) — Oil traders snapped up bullish bets on US crude futures to protect against the chance that prices could spike toward $100 a barrel if Middle East tensions ratchet up in the days after the US election.
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December call options equal to more than 10 million barrels worth of US crude changed hands in a popular $90/$100 spread trade late on Monday, data compiled by Bloomberg showed. The contracts are set to expire Nov. 15, offering a relatively cheap way (compared with futures contracts) for traders to protect against price spikes in the coming days.
The fourth quarter has begun with some of the biggest swings in oil-options markets in years. There remains uncertainty about what the period between the Nov. 5 US election and the presidential inauguration in January will mean for the continued tension in key oil-producing regions of the Middle East. Iran is planning a complex counterattack on Israel involving powerful warheads and other weapons, the Wall Street Journal reported this week.
Interest in trading bullish call options hit record levels last month across the oil market, with open interest for calls setting new peaks. Though some of the bullishness faded after Israel’s limited attack on Iran last week, premiums of calls over puts, or bearish options, remain near their highest levels since Russia invaded Ukraine in 2022.
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