We pay for the analysis which is awesome and you’ve been spot on with your predictions but tell us where the money is to be made. What’s the next trade ?
Barely OTM calls or debit spreads for Q3 and Q4 expirations on WEAT, CORN, DBA. Alternatively, options on the actual futures contracts would be better. Liquidity on these ETFs is dogshit. Hence the suggestion to stay very near the money in case things go south you’d want to still be able to sell them.
Here I had claude make this infographic site after I did a lot of research on historical precedent and current supply constraints.
Do your own due diligence and don’t trust a stranger off the internet. But here’s my thesis. Prices are actually lower since this was created so numbers would look a little different but the entry levels are better now than before. Absolutely nobody is pricing in the 3rd order, long lag time effects yet in my opinion.
There is also pretty decent money left in debit spreads or broken wing butterflies on BNO and USO for may-july expirations.
You have to wonder if there is a more… sinister reason for the long duration backwardation. Markets could be pricing in lower oil prices later this year not due to a peaceful resolution, but due to extreme demand destruction from the fallout from the war.
There’s a lot of different scenarios in varying levels of travesty that could point to demand destruction larger than we saw during COVID lockdowns.
Not saying this is my base case rationale. But something to consider in the investment calculus nonetheless.
Um. WTI only settled above Brent because it's still tracking the May contract vs Brent that just rolled to the June contract.
We pay for the analysis which is awesome and you’ve been spot on with your predictions but tell us where the money is to be made. What’s the next trade ?
Barely OTM calls or debit spreads for Q3 and Q4 expirations on WEAT, CORN, DBA. Alternatively, options on the actual futures contracts would be better. Liquidity on these ETFs is dogshit. Hence the suggestion to stay very near the money in case things go south you’d want to still be able to sell them.
Here I had claude make this infographic site after I did a lot of research on historical precedent and current supply constraints.
https://claude.ai/public/artifacts/cbd5a2a8-9d51-4c6a-acff-beee3b5442c8
Do your own due diligence and don’t trust a stranger off the internet. But here’s my thesis. Prices are actually lower since this was created so numbers would look a little different but the entry levels are better now than before. Absolutely nobody is pricing in the 3rd order, long lag time effects yet in my opinion.
There is also pretty decent money left in debit spreads or broken wing butterflies on BNO and USO for may-july expirations.
Great analysis. This is exactly it: Iran doesn’t need to win. It just needs to make the war expensive
You have to wonder if there is a more… sinister reason for the long duration backwardation. Markets could be pricing in lower oil prices later this year not due to a peaceful resolution, but due to extreme demand destruction from the fallout from the war.
There’s a lot of different scenarios in varying levels of travesty that could point to demand destruction larger than we saw during COVID lockdowns.
Not saying this is my base case rationale. But something to consider in the investment calculus nonetheless.