Commodities Trading

The Oil Arbitrage: Brent vs WTI

It is no secret that the most important crude oils in the world are the European Brent (extracted by 15 oil fields located in the East Shetland Basin in the North Sea) and the American WTI which is extracted in the US and delivered at the Cushing in Oklahoma. It is well…

The Crack Spread

The crack spread is probably the most important financial strategy within the energy industry. The price of the crack spread is so crucial that it is closely monitored by commercials, hedge funds, banks, energy companies and governments. The value of the crack spread summarizes and combines, in 1…

The Baltic Dry Index

The Baltic Dry Index measures shipping activity of raw materials around the world. In particular, the BDI provides a very efficient way to quantify and evaluate the strength of the global demand for commodities and raw materials. The Baltic Dry Index is compiled, on a daily basis, by the…

Oil Fundamentals: Upstream, Midstream, Downstream & Geopolitics

Crude oil is a scarce resource which means that at some point the existing oil wells will be exhausted. The current estimations, given the actual extraction and consumption rates, sustain that the black gold will be…

The Volatility Smile

Option markets are multidimensional, in fact, options spreads can be created using different strikes, different maturities or different type of options (calls / puts). Besides, option traders cannot track instantaneous price changes on the entire option chain, hence, it is easy to derive…

E-Mini Crude Oil Futures Volatility Forecast (05/10/2011)

E-Mini Crude Oil Futures Volatility Forecast (27/09/2011)