Bets on Oil Above $100 in December Jump 10% in Options Trading

Discussion in 'Wall St. News' started by WallStWhizKid, Oct 15, 2009.

  1. By Margot Habiby

    Oct. 15 (Bloomberg) -- Bets that oil prices will top $100 a barrel in December jumped 10 percent yesterday to a record on the New York Mercantile Exchange, as the underlying futures rose to the highest level this year.

    The number of contracts outstanding on December $100 call options rose to 77,494 yesterday, according to Nymex data released today. That was up from 70,442 the day before, the previous high. The contract has more open interest than any other oil option on the exchange. November options expire at the close of floor trading today.

    The December calls rose 1 cent to 13 cents a barrel, or $130 a contract, yesterday on record volume of 12,595 lots, 45 percent more than the next most-active contract. They gained 8 cents today to settle at 21 cents a barrel at 4:26 p.m., based on Nymex electronic data and preliminary volume of 698 lots.

    The exchange distributes real-time data on electronic trading of crude oil options. Most information on floor trading, where the bulk of options trading occurs, is released the next business day. The delayed data include overall volumes and open interest. The exchange releases a settlement price at the end of each business day.

    Oil for December delivery rose $2.48, or 3.3 percent, to settle at $78.08 a barrel at 2:44 p.m. on the Nymex. Yesterday, it added 89 cents, or 1.2 percent, to $75.60. December futures have risen 12 percent in six days.

    Oil for November delivery, the most active futures contract, added $2.40, or 3.2 percent, to $77.58 a barrel. Earlier, the futures touched $77.97, the highest level in a year, after an Energy Department report showed an unexpected decline in U.S. gasoline stockpiles.

    In the Money

    Bets that oil prices will rise above $77 a barrel in November were the most active crude options today, rising 37 cents to 58 cents a barrel, or $580 a contract, on volume of 1,595 lots. Since November futures settled above $77, the contract expired “in the money” at the end of the trading day, meaning its holders would make a profit.

    Other active options contracts today were December $80 calls, up 71 cents to $3.18 a barrel; December $70 puts, down 78 cents to $1.25 a barrel; and December $85 calls, up 42 cents to $1.63 a barrel.

    Yesterday’s most active options included December $90 calls, March $60 puts, March $90 calls and December $80 calls.
  2. the further oil rises,

    the close we get to repeating the circumstances that brought about the 2007 - 2008 collapse,

    remember Jim Crammer's outburst, seen over 1.6 million times from 2 years ago, on

    expect to see that happen or similar again,

    there really are economic costs to using such essential commodities as vechicles of investment and speculation...

    yes the pundits all claim that without that type of attention, the markets would not perform properly, and you can't stop people from selecting petroleum as an investment vehicle...

    self interest at some point will stop most of us all
  3. Oil is going to $50 before $100 and it won't price 100 this year. A 30% gain in crude oil would mean the DJI at 13-14,000 with the FED interest rate at 0%
  4. So 10% rise in crude equates to about 1,000 DJIA points? If thats the case then oil has more than doubled (100%) from the lows in Feb. so that would put the current DJIA at 16,000+.
  5. one of the latest fads that are being used to sel the next bubble, which has already formed is and are the notion that somehow crude prices are linked properly to DJIA prices of stocks.....

    they (pundits and such) are using the usual stooges (financial news channel reporters and anchors) to push this notion that there is a valid linkage between the two...

    funny, never saw IBM stock in front of me at the gas pump, and never saw INTC, RMBS, GOOG nor BIDU there either

    so, actual linkage?, hmmm, tenuous at best..

    and these news stations actually pay these idiots with their master degrees and never check the validtiy of the stupidity that they keep espousing...

    and perhaps they wonder why so many traders on these boards have such a low regard for them (CNBC types and such..., for example)
  6. S2007S


    Just forget about any economic improvement with oil above $100. Oil and commodities are going back into bubble mode.
  7. improvement?


    just forget about recovery,

    also, just forget about recession, and call it what it has been, depression, and expect it to return with a vengence...
  8. S2007S


    Right on.....

    I highly doubt oil gets this high, could it, of course it can, however anyone thinking higher oil prices is a positive due to the fact that it moves on anticipation of an economic recovery has it completely backwards.

    I actually want to see $100, $125, $150 $200+ oil so that people can then realize the negativity it would bring to the economic recovery which in my opinion is still years and years and years and years away.

    Higher oil prices cannot be sustained in a weak economy that's being propped up by worthless monopoly money, it will take many years for fools to realize this when in reality its right in front of them now.
  9. cheap money, through the "carry trades" inflated the coffers of these hedge funds that are defunct.

    they took those monies and bought essential commodities, and for example, oil became over $142 USD/bbl....

    Clinton made arrangements with the Saudai(s) for $14, $15, $18 oil, and we had the largest recovery in record US history,

    even doing something that we never thought would ever happen, namely paying off ALL 30yr TBonds, and establishing a $1.4 Trillion USD surplus....

    its just as logical and practical as that!

    usd - no longer reserve currency?
    usd - debts and worthless money?

    well, there's certainly something that can be done about that!