Oil Options Markets Turn Bullish With Rising Geopolitical Risks

Apr 2, 2024

Observations & Insight

Options Discovery Episode 31: Technical and Fundamental Analysis in Options; Bret Kenwell, Options Analyst at eToro, Discusses This and More With JLN’s Asma Awass.

In this episode of Options Discovery, Asma Awass discusses technical and fundamental analysis in options. This episode includes a breakdown of why price movements are essential to technical analysis and why intrinsic value is the main indicator in fundamental analysis. Asma then sits down with Bret Kenwell, an options trader at eToro, who shares more insight into these two types of analysis. You can check out eToro here: https://www.etoro.com/en-us/

Watch the video »


Technical and Fundamental Analysis in Options; Bret Kenwell, Options Analyst At eToro, Discusses Options Analysis Strategies In This Options Discovery Full Interview

In this Options Discovery full interview, Asma Awass speaks with Bret Kenwell, an Options Analyst at eToro. Bret addresses a variety of topics from his career, including his background in financial journalism. He gives more insight into the different kinds of technical analysis, technical indicators, and price trends. Bret also talks about the basics of fundamental analysis and the influencers behind it. You can check out eToro here: https://www.etoro.com/en-us/

Watch the video »

Lead Stories

Oil Options Markets Turn Bullish With Rising Geopolitical Risks
Julia Fanzeres and Devika Krishna Kumar – Bloomberg
Oil options traders are increasingly looking to protect against rising crude prices as tensions escalate in the Middle East.
Near-term market gauges for Brent and US crude have flipped over the past week to reflect more demand for bullish call options than bearish puts. The WTI second-month call skew, which shows what traders will pay for options that profit from a rise in prices versus a decline, switched on Tuesday for the first time since November, according to data compiled by Bloomberg. Oil options markets typically skew bearish as producers seek to protect against price drops.

Zero-day options: unique market dynamics and risk considerations
In a recent Risk.net webinar, experts discussed the growth and usage of 0DTE options, challenges in modelling their prices and risks, practical risk management issues and whether they pose systemic risks to the market.

Investors Eye Next Moves After Stellar Quarter For S&P 500: Option Demand For ‘Black Swan Events’ Rises
Benzinga via Markets Insider
Following a robust first quarter that marked one of the S&P 500 Index’s best starts in decades, investors are contemplating their next steps amid an all-time market high.
According to Bloomberg, the recent behavior in the options market reveals a preference for extreme volatility hedges over minor correction protections.

Cboe eyes physically-delivered VIX options for US futures traders
Radi Khasawneh – FOW
Plans to allows traders to receive volatility index (VIX) futures to settle options at Cboe Global Markets will open the way to the creation a tradeable one-day contract, as short-dated options trading continues to drive US equity derivatives volumes

Popular FX Derivatives Market Faces Crushing Blow in India; Brokers ask clients to close out rupee derivatives positions
Subhadip Sircar and Ronojoy Mazumdar – Bloomberg
India’s booming market for exchange-traded currency derivatives is headed for a sudden demise.
A new rule set to take effect on April 5 is expected to force out most of the market’s most active players, drying up volumes that reached $5 billion-a-day.

Trump-and-dump: Speculators bet on Truth Social ‘meme’ stock
Abigail Summerville – Reuters
Mohammed Al Shalloudi, a 21-year-old graduate data analyst in the United Arab Emirates who invested in Donald Trump’s social media company, has little in common with the former U.S. president’s political supporters.
Al Shalloudi bought shares in Trump Media and Technology Group (TMTG) (DJT.O), opens new tab, but not because he believes in the business of its app Truth Social or because he is a Trump fan. He is part of an army of speculators seeking a quick lucrative trade whose bets on TMTG have made it one of the most overvalued and actively traded U.S. stocks.

Fears over persistent inflation resurface in U.S. Treasury market, ushering in volatility; ‘There’s an underlying unease that inflation is not going to fade away as easily as the Fed’s base-case scenario,’ says one economist
Vivien Lou Chen – MarketWatch
Monday’s strong manufacturing-related data from the Institute for Supply Management was enough to unleash fears of persistent inflation in the U.S. government-debt market — concerns that had largely been speculated upon but, until now, hadn’t led to a recalibration of long-term market-based rates.

Japan warns of action against excessive yen volatility
Leika Kihara – Reuters
Japanese Finance Minister Shunichi Suzuki said authorities were ready to take appropriate action against excessive exchange-rate volatility, repeating his warning to yen bears as Tokyo tries to prevent a destabilising fall in the currency.
Suzuki stopped short of threatening to take “decisive action” against excessive moves, language the minister used last week when the yen slumped to a 34-year low, suggesting officials are keeping their powder dry as they watch how currency moves play out.


OCC March 2024 Monthly Volume Data

CME Group, the world’s leading derivatives marketplace, today announced that it will launch options on Euro short-term rate (EURSTR) futures on May 20, 2024.
CME Group
“Our new EURSTR options will help clients more precisely manage their risk as expectations around European interest rate decisions continue to shift,” said Mark Rogerson, EMEA Head of Interest Rate Products, CME Group. “This launch is the next step in the development of our robust EURSTR marketplace and builds on the growing liquidity and participation in our EURSTR futures.”

Farmer sentiment improves as interest rate expectations shift
CME Group
U.S. farmers’ outlook improved in March as the Purdue University/CME Group Ag Economy Barometer index increased to 114, marking a 3-point rise from February. While the Index of Current Conditions fell by 2 points to 101, the Index of Future Expectations climbed to 120, up by 5 points from February. The disparity between current and future indexes was primarily influenced by farmers’ perceptions of a financial downturn taking place in the past year, coupled with some expectations for improvement over the next 12 months. The March survey was conducted from March 11-15, 2024.

Cboe Global Listings Reaches New Milestone Surpassing 1,000 ETFs Listed Across its Global Network
Cboe Global Markets, Inc. (Cboe: CBOE), the world’s leading securities and derivatives exchange network, today announced that it has achieved a new milestone, surpassing more than 1,000 exchange traded funds (ETFs) listed across its global network of listings exchanges. “This ETF listings milestone is another major step forward in building our global listings business. It’s a testament to Cboe’s continued innovation in the ETF ecosystem and focus on customer-centric service and support,” said Dave Howson, Executive Vice President, Global President, Cboe Global Markets. “From industry-leading market intelligence and technology, to a global liquidity provision program and 50 years of experience as a company, we provide our issuer partners with an innovative, collaborative, and seamless approach to global account management when listing with Cboe.”

CME Group Reports March and Q1 2024 Market Statistics
CME Group
Record Q1 U.S. Treasury futures and options ADV of 7.8 million contracts; Record Q1 Options ADV of 5.9 million contracts. CME Group, the world’s leading derivatives marketplace, today reported its March and Q1 2024 market statistics, showing average daily volume (ADV) reached 24.3 million contracts in March and 26.4 million contracts in Q1. Market statistics are available in greater detail at https://https://jlne.ws/3J3IQ0q

Spot market sales statistics for March 2024
Deutsche Boerse
A trading volume of 121.13 billion euro was achieved on Deutsche Boerse’s cash markets in March (previous year: 140.21 billion euro/ previous month: 108.42 billion euro). Of this, 117.16 billion euro was accounted for by Xetra (previous year: 136.42 billion euro/ previous month: 104.41 billion euro ), meaning the average daily Xetra turnover was 5.86 billion euro(previous year: 5.93 euro).

SIX Exchanges Figures: March 2024
SIX publishes the monthly key figures for SIX Swiss Exchange and BME Exchange about the trading and listing activity in Switzerland and Spain


Why the Stock Market Is Dropping—and What to Do Now
Jacob Sonenshine – Barron’s
That stock market DJIA is finally dropping, something investors should have seen coming after five months of gains. Now it’s time to ride out the storm.


OIC 2024 Educational Series: Probability, Volatility and Premium Income Strategies
During the second quarter of 2024, The Options Industry Council will host a new round of educational webinars on a variety of topics, with a total of six live sessions planned.
Led by OIC instructors, two presentations are scheduled for each month of the quarter. Starting in April, investors will have the opportunity to learn about Delta as a probability measure, followed by an overview of standard deviations and tail risk. In May, attendees can take part in a review of volatility and then another webinar on skew and relative value. For June, premium income is the topic, with the first event of the month focusing on covered calls, while the second will be a discussion of cash-secured puts and the wheel strategy.

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