03.08.2016 - Oil Options Traders Don’t See Dip to $40 Leading to Market Rout
Oil analysts from Citigroup Inc. to Bank of America Merrill Lynch are confident that the new bear market in crude will be short-lived. The options market increasingly agrees with them. Investors are paying the smallest premium in two months to protect against a drop in prices from now through the end of the year, even after oil entered a bear market. The so-called put skew on December Brent and West Texas Intermediate options -- the premium traders will pay for insurance that prices will fall rather than rise -- has narrowed more than 30 percent since early July. The skew on second-month WTI contracts has fallen by almost half...............................................Full Article: Source
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