Oil Traders Cash In as US Sanctions Spark Crude Price Volatility
Oil traders are celebrating as new US sanctions against Russia drive prices up, creating opportunities for big profits.
Oil, Traders, US Sanctions, Russia, Crude Prices, Volatility, WTI
Bloomberg: Oil traders who took a chance on options are really cashing in now. Prices are jumping thanks to new sanctions against Russia, and it’s a big win for those who bet on volatility.
After the US announced sanctions on two major Russian energy firms, crude oil futures shot up over 3%. This has traders buzzing, especially since the implied volatility spiked the most it has in two months.
With the Biden administration’s move, it looks like Russian exports could take a hit, which is tightening the supply that was expected to be in surplus. Traders are now more interested in bullish bets, flipping the WTI skew to favor calls for the first time since December.
For those who bought straddles—options that profit from price swings—this is a golden opportunity. After a period of low volatility, the market is finally moving again, and traders are ready to take advantage.
As we approach the expiration of some contracts, like the February WTI options, traders are seeing significant gains. One contract that settled at $0.43 is now worth nearly $2, which is a nice payday for those who held on.
There’s also a lot of action in the options market, with traders betting that the premium of February futures over March will rise significantly. This kind of bullish activity is a sign that traders are feeling optimistic about the market.
[rule_2]