When Oil Prices Stabilize, Find New Arbitrages with Better Data

For the oil traders who feed off volatile price movement and market inefficiencies to make profits, the past few months have been a bit of a drag. After the first half of 2020, which was the most volatile period of many crude traders’ careers, the third quarter brought oil merchants a calm, range bound WTI futures market that hovered between $36/bbl and $43/bbl. Yes, oil prices are higher now than they were in the crude market’s darkest days of 2020 in March and April. But that doesn’t necessarily mean more profits for traders. Price volatility, and the fundamental market mismatches that create it, give oil traders the opportunity to take profits regardless of the price level. The larger the price swing, the bigger the opportunity to maximize returns. WTI Futures Draw Calm in Q3 2020 Figure 1 | October 2020 Nymex WTI futures prices displayed in MarketView Desktop. A Fully Equipped Crude Trading Desk Always Wins As we enter the fourth quarter of this unforgettable year, it’s a great time to reflect on the ways to gain an edge on the market, especially when price action is calm. Margins are getting thinner and trading liquidity has fallen in oil futures… continue reading

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