Options on the US Oil Fund ETF are trading triple their normal levels today as Oil has regained some ground on weather news this afternoon. Heading to the close nearly 150,000 contracts have traded today, with 3 puts trading for every call and premium sellers leading the action. Spot level is currently $89.08, down 4%, and aggressive sellers have been targetting the Jan-09 80 and 85 puts, driving implied volatilities down several points and suggesting a view that the correction in oil prices may be nearly done. Put sellers have collected nearly $47 million today, dwarfing the amount of premium traded in the calls by nearly $34million and illustrating at least one player’s desire to play the rest of the year from a short-premium postion.
Category: All ETFs
About the Author (Author Profile)
Henry Schwartz is the president of Trade Alert LLC, a provider of real-time options analysis tools to leading Wall Street firms. His systems analyze hundreds of thousands of transactions per second to help professionals identify and interpret market activity in real time, supporting informed trading decisions and intelligent idea generation. He has held institutional trading and management roles with Bank of America, Bear Stearns, Salomon Brothers and the Hull Group, and made markets on the CBOE and AMEX floors in the US, and EUREX and MONEP overseas. Prior to founding Trade Alert, he led the electronic market-making group at Bank of America coincident with the launch of the International Securities Exchange. He received his bachelor’s degree in Economics from the University of California, San Diego and his MBA from NYU’s Stern School of Business.