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Can you imagine if the Saudis and Russians (really just the Saudis) hadn't cut production and the Saudi's weren't purposely cutting exports to the US to bring our inventories down? We'd would have easily touched $40 or lower in WTI before this trade war and Iran crisis.

Warren Buffett without a doubt. At least as a contrarian value seeking investor, since he rarely sells anything. Best hedge fund traders are/were Steve Cohen and Ken Griffin. Best day/pit futures trader was probably Harris Brumfield, better than Tom Baldwin according to insiders. Best option...

WTI supply is plentiful and there's no stopping exploding US shale production. Brent supply is tight and getting tighter, thanks to the Saudis and maybe the Russians. Saudis won't renew status quo production until they get their $85/barrel in Brent. Shale production won't slow down until WTI...

What does S&P Platt's run you?

Obviously they're correlated, probably over 90%. But do they move in tandem because of the popular spread between the two, or does one lead the other more often than not? My guess is that it depends on the time of day and what's going on overseas vs domestic.

What about WTI vs Brent? Which one leads? Does it depend on the time of the day (WTI during US hours, Brent during London hrs)?

The Fed's not lowering rates this year like the markets (equity and bonds) are foolishly pricing in. Oil prices will crash with equities and bonds if the Fed disappoints.

Crude typically accounts for the biggest % of any energy or commodity index.

I keep reading that crude fundamentals are very bullish, and without the China-US trade bs and stock market skittishness, WTi would be trading $66 or higher. They keep predicting massive draws in inventories, which has yet to materialize, saying it's right around the corner.

How big is the rally when the market starts to ignore and shake off this trade war noise? Are we one higher than expected draw and one optimistic Trump trade talk tweet from seeing $66/barrel again?

Implied Vol (as well as Realized) in WTI and Brent are close to the lows for the past year, and the put skew is abnormally steep relative to the calls. The options market is telling you the risk is to the downside.

Hi. Thanks for asking. I am currently using Vela's (formerly known as OptionsCity) Metro Platform. Most of their clients are prop groups and professional traders who day trade options for a living, which I do. It's not cheap.

Probably best to incorporate a vol and directional bias (which is the same bet in my opinion) in your skew bets, it's unavoidable. And you can amplify your skew and vol bets with calculated put/call ratio trades rather than a high maintenance vega neutral RR that needs to be readjusted every...

Well there are many ways to "skin a cat", and trading perceived mispriced skews and curve slopes within the term structure of an underlying, or temporarily misaligned curve shapes between two or more highly correlated underlyings is just one of many ways to generate alpha. But it's difficult to...

Got it. You're just taking the normal distribution of historical returns of an asset and determining a Skew from observed data. Well, as you know and its been proven that implied (expected) volatility is a much better predictor of future volatility than historical. Although implied vol typically...

Just curious, how would you calculate Skew from the historical returns of the underlying? That doesn't sound possible.

Not sure if observed skew behavior is a good predictor of future volatility (standard deviation on your chart). From what I've seen, they usually move in tandem with each other, with demand for downside or upside (changes in the skew) often lagging the violent moves in the underlying. For...

Vol has come down from multi-year highs (seen late last year),and along with it the inverted steepness of the calendars (in vol terms). If we continue to trade sideways or see a slow grinding rally, Mar vol could easily print lower than Dec vol with the term structure steepening toward the...

Sure. I just ran my numbers on excel. these were done last night during a quiet evening session. Here they are: Expiry DTE Spot Price 90% Strike ATM IV 90% Strike IV (ATM -10%) SK10 calc Normalized 25D RR Mar-19 17 52.09 46.88 35.90% 40.90% -0.206 -7.37 Apr-19 46 52.37 47.13 35.15% 37.48%...