By Nick Rokke October 4, 2018
Traders are betting big on an oil rally…
Last Monday, about 274,000 call option contracts traded on Brent crude oil. That surpassed the previous high in 2015—when oil was about $38 a barrel.
Call options are some of the most speculative plays you can make in the market. Speculators buy them on a security (like stocks) or commodity (like oil) when they anticipate prices will go much higher.
In this case, traders expect another large move up in oil… and quickly.
Of those nearly quarter-million call options trading, 28,000 will profit only if oil rises above $100 per barrel in the next six months. That includes 10,000 betting Brent will top $110 by the end of November.