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10/06/21 10:53
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WTI crude drops below $70, indicating bearish trends; watch key thresholds for market insights. Source: Bloomberg Shares Commodities Market trend Price Price of oil Oil Diego Colman | Market Analyst, New York | Publication date: Thursday 07 December 2023 05:02 On Wednesday, WTI futures recorded a sharp decline, marking the fourth consecutive session drop and reaching June's lowest level. Today's round about 4% fall adds to December's cumulative loss of nearly 9%, breaking the crucial $70.00 threshold—a bearish development from a technical perspective. The recent selloff in energy markets hasn’t been driven by a singular catalyst but rather a convergence of multiple factors. First off, investors have been dismayed by OPEC+ supply cuts announced in late November because they will be voluntary rather than mandatory, which can potentially enable members to circumvent individually committed reductions. Global economic challenges deepen oil market turmoil Disappointing growth in China, coupled with record US crude production at a time of slowing economic activity, has also created a hostile environment for the commodity. The uptick in US fuel stockpiles beyond the seasonal norm in recent weeks has strengthened the belief that demand destruction is taking place, further weighing on sentiment. Speculative activity by over-leveraged CTAs, which tend to be trend followers, has reinforced oil's weakness, bolstering volatility and exacerbating prevailing directional moves. With CTAs becoming increasingly dominant, their influence on markets will continue to grow, giving way to more and more episodes of rapid and significant price swings. Oil's trajectory tied to US economic health Focusing on the outlook, oil’s path will likely hinge on the health of the US economy. That said, if incoming information validates the view that a recession might emerge soon, prices could remain depressed and even head lower, with the next bearish zone of interest at $67.00. Subsequent losses could draw attention to March and May’s swing lows near $64.00. In the event of a bullish turnaround, a possibility worth considering given some of the disconnects between physical and paper markets, initial resistance lies around $70.00. A successful breach and price consolidation above this threshold might rekindle buying interest, setting the stage for a rally towards $72.50. Further upside progress would shift the focus to the $75.00 mark. Crude oil prices daily chart Source: TradingView This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. -
Market update: is Bitcoin on the way to $50k or retracement first? Bitcoin nears $45k; options suggest $50k surge. Crypto resilient, market cap up $750B since Nov '22. Source: Bloomberg Forex Shares Cryptocurrency Bitcoin ETF Option IG Analyst | Publication date: Thursday 07 December 2023 07:53 Bitcoin finally stalls following five successive days of gains totaling +-16% and coming within a whisker of the $45k mark. The performance of Bitcoin and the crypto industry in 2023 continues to surprise given the challenges being faced by the industry over the past 18 months. The world’s largest cryptocurrency is approaching $1T in market cap and is up 180% since November 2022. The 45% of that growth has been recorded over the past six weeks as speculation continues to grow regarding the spot Bitcoin ETF. As things stand, based on the Grayscale Bitcoin Trust's NAV discount, which has narrowed dramatically, the market assigns a probability of around 90% that the Securities and Exchange Commission will approve such a vehicle. The crypto industry as a whole is benefitting at present having added approximately $750 billion of market cap since November 2022. Looking at the crypto heatmap below and surprisingly the major cryptos appear to be experiencing a lull today which could also be down to some profit taking following the recent rally, while altcoins continue to rise with avalanche up as much as 11%+ on the day. Crypto market chart Source: TradingView Crypto industry resilience If the last 24 months have proven anything it's that crypto is here to stay. Having faced unprecedented challenges and many powerful and vocal proponents to its uses and use cases with the latest being JPMorgan CEO Jamie Dimon, who stated he is deeply opposed to crypto. His argument being the same as countless others who attribute crime, money laundering and tax evasion which is ironic considering the US dollars role in crime across the globe. A story for another time. Of course, Bitcoin does have its vocal supporters with the likes of ARKS Cathy Wood and MicroStrategy founder Michael Saylor. The failure of US banks this year may have been a blessing in disguise for the crypto industry. There are still clouds hovering over the industry, but this is becoming a normality with market participants hardly taking notice anymore, or so it may seem. BlackRock announce seed funding for Spot ETF of $100k which is small but it is just a first step with cash likely to change hands a lot quicker once an approval occurs. This shows commitment by BlackRock is ensuring that they are ready for a potential approval. Bitcoin price outlook From a technical standpoint BTCUSD is approaching a key area of resistance around the $45k mark. However, options markets are hinting that Bitcoin will hit $50k by January with the Spot Bitcoin ETF expected to be approved early in January as well. The question I am grappling with is what will come first? A test of the $50k mark or the spot Bitcoin ETF approval? Open interest for Bitcoin $50,000 strike calls is massive, as displayed in the chart below with options also suggesting the recent rally is just the beginning. Open interest chart for Bitcoin Source: Kobeissi Letter Resistance levels: 45000 47500 50000 Support levels: 42500 40000 38590 BTCUSD daily chart Source: TradingView This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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When writing put options on these platform do I get assigned the 100 x index (or stock) when the market price is at or below the strike price or if the market price is at or below the strike price on expiration date? Or as it’s a CFD the option is either profitable or not and I am not assigned the index or stock? Also, if I am assigned the index or stock, does this also apply to paper trading? As the other day my paper trade put option I sold was above market price but I was not assigned.
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