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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
OIL OPTIONS
Despite the immediate upside price risks from Russian supply disruption significantly reducing compared to back in March and April there are still plenty of open Brent options at the high price levels. The biggest open call option positions across the main expiries are at the 125$/bbl and 150$/bbl strike price.
- There are some open positions covering the more extreme moves with 35k contracts open for 200$/bbl calls and just over 5k contracts open in the 300$/bbl calls. Trading in the 200$/bbl calls increased significantly during the start of the Ukraine conflict but has since levelled off as the risk of large upside price swings have reduced. Volume of open positions in Dec22 expiry 200$/bbl calls increased from 2.9k at the start of the year to approximately 11.5k at the start of April. Since then, only a few new positions have been added with open interest now at 12.4k.
- The graph below shows the change in value and the change in open interest of the Dec22 200$/bbl calls over the last six months.
- Source: Bloomberg
- On the puts side, the volume of open positions is spread across strike prices with the biggest volumes at strikes from 80$/bbl down to 40$/bbl. The open interest of the lower puts was gradually increasing at the start of the year but peaked in early Feb before falling back as focused switched to the upside. The slightly higher strike puts such as at 80$/bbl have seen a gradual increase since Feb covering for any market downside corrections.
- The graph below shows the strikes with significant open interest in Brent options from the main contract expiries:
Source: MNI / Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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