Bearish odds on OIL ETF?
CHICAGO, March 11 (Reuters) - Option investors on Tuesday appeared to be betting on a decline in the price of oil in an exchange traded fund linked to the commodity even as U.S. crude oil prices surged to another record.
On the New York Mercantile Exchange, April crude CLJ8 settled at a record $108.75 a barrel, up 0.79 percent, trading from $106.61 to a new intraday high of $109.72, exceeding Monday’s $108.21 peak.
NYMEX crude has settled at a record above $100 eight times since Feb. 19 and option traders may be positioning protectively for a slowdown in this momentum reflected by the spike in put volume in the United States Oil Fund USO.A, a fund designed to track the price of crude oil.
According to option analytics firm Trade Alert, a total of 52,000 puts compared with 9,138 calls changed hands in the ETF, three times the normal volume.
“There is weekly inventory data due out tomorrow, which could affect oil prices,” said independent options trader Frederic Ruffy. “Some players might be looking to protect profits by purchasing puts on the USO ahead of the news.”