Monday Nov 1 2021
For some reason my screen capture mode is not working. That said, the Energy ETF XLE has broken a multi-year downtrend from its high in 2014. My count is that the chart bottomed at 45 and is now in a fifth wave at 57.47. Reading the article on page B12 in today's WSJ, this is about right. It reports a swiss banker is buying oil for his clients investments. So someone nt in the oil business is piling in during a fifth wave up. the time to buy was at the Wave 2 low of 27.50.
Still as we note oil is an economic and financial commodity. And world buying is pushing oil prices higher, now around $84 for Brent and WTIC. Option bets are being placed on $2100 oil. That is the equivalent as we reported Friday of Tesla at $2,000.
the graph of options trading volume on page A 2 is one for the record books. This is a great book end for Tulipmania back in 1636.
the average daily volume for 2021 is 38.6 million contracts. this dwarfs 2020 at about 28 million.
The article indicates that strings of options orders are sold to other firms. Firms are moving trades to exchanges where best price is not necessarily the criteria if in fact I read this correctly. Consider there are now some 2,000 different kinds of Apple options, simply incredible.
Small investors are buying options which historically is a losing trade. The fact that this seems t be a winning trade turns tradition on its head. But that happens at developing market tops.
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