- $100 Oil is no longer an ‘outrageous’ bet in the call-options market
- Some speculative traders are now betting on $200 oil in December 2022
- For those betting on $100 oil, the leader of the OPEC+ alliance, Saudi Arabia, has a message: look beyond the end of this year; an oversupply is coming next year
As oil prices hit multi-year highs, some speculative traders are betting on the options market that oil could exceed $100 a barrel by the end of this year and even reach a record $200 per barrel by the end of 2022.
Call options give traders the right—but not the obligation—to buy assets at a certain price, the so-called strike price, by a certain date.
The amounts of call options at triple-digit strikes have soared in recent weeks, suggesting that more speculative traders are attracted by potential quick profits from options trades, which are relatively low-cost ways to speculate on the direction of an asset.