TWIFO 161: Crude Skew and other Mysteries

TWIFO 161: Crude Skew and other Mysteries

• HOST: MARK LONGO, OPTIONS INSIDER MEDIA GROUP
• CO-HOST: NICK HOWARD, BANTIX TECHNOLOGIES
• CME HOTSEAT GUEST: ADAM WEBB, Founder of Macrohedged 

CRUDE OIL

Oil ends lower as support from storm-fueled, 11 million-barrel drop in U.S. crude supplies disappears

• Oil futures settled lower on Wednesday, as support from a storm-induced, 11 million-barrel drop in U.S. crude supplies wore off and traders turned their attention back to concerns about weaker energy demand.
• U.S. crude inventories dropped by 10.8 million barrels for the week ended July 19, according to data from Energy Information Administration Wednesday, and production also edged lower, with analysts citing temporary disruptions caused by a Gulf of Mexico storm earlier this month.

 

METALS

GOLD

• Gold prices have lost their good gains seen earlier in the session and in overnight trade, following some stronger-than-expected U.S. economic reports.

Reasons Gold trade 

• Skew was over done 
• Could get size on 
• Limited risk 
• Didn’t want to play a full RR as there was silly blow out risk to 1500
• So we looked at just the PSkew 

 

EQUITIES

 

• VIX  13 - DOWN 1.25 FROM LAST SHOW - THREATENED THE 12 HANDLE RECENTLY

• VVIX: 87.5 -  UP 3 FROM LAST SHOW

• RVX: 15.80 -  DOWN .6 PTS 

 

• VIX/RVX SPREAD - 2.8 - WIDER BY NEARLY A POINT FROM LAST WEEK
• EARNINGS SEASON DRIVING MORE VOLUME IN MICRO EMINI FUTURES

 

FUTURES OPTIONS FEEDBACK 

• QUESTION FROM SHUTDL: Nick still scalping his gold gamma?
• QUESTION FROM crypto messi: Is WTI SKEW usefull for directional trading?
• COMMENT FROM @trader1906 - It won't give you buy sell signals, I have modeled some skew bends that let you know moves are over done similar to the gold one I published but no holy grail.
• QUESTION FROM AZERAFEL: What is the best commodity market for options traders right now. Best mix of volume, volatility and liquidity? When is Nick coming back on the show?
• QUESTION FROM DAZZNE: Can you explain how the fedwatch tool actually works?