Everyday Finance

Oil Is Up Due to Fundamentals, Not Speculation

Speculators can only manipulate an instrument so much until arbitragours exploit inefficiencies in the market. Oil is one of the most efficiently traded instruments in the world given its volume and liquidity. Unfortunately, I have to concede that the fundamentals of short supply and increasing demand are driving it upward based on fundamentals. While I was wrong in my thinking last month (thankfully, the May options are expired) betting on a downward move with synthetic options, you can do the same in either direction and this is a pretty neat way to use no net funding to control blocks of 100 shares of USO or your desired oil proxy to capitalize on volatility up or down:

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