Oil Traders Place Record Bets Against Price
Traders have placed record bets against oil, with over 764,000 contracts of Brent put options being traded on Tuesday, according to preliminary ICE Futures Europe data. This is a significant bet against the price of oil, as these options pay off when prices fall below a set level.
The biggest trades made on Tuesday pay out if oil drops to around $70 by December, from its current price of roughly $96. A put spread of $70/$69 contracts alone topped 110,000, with these positions profiting only if Brent crude sinks below $70.
However, it's worth noting that the record volume includes narrow spreads, which are often used to hedge existing positions rather than bet outright. This may indicate that traders are using these options to manage risk rather than make a pure bearish bet on oil prices.