Crude Joke

Hedging Geopolitical Risk

Frankly, I completely ignored the Houthis attacks on Western ships in the Red Sea. Maybe it’s because the Houthis remind me of the Tusken Raiders in Star Wars (those desert people with the weird outfits), maybe it’s because the US navy is mightier by a factor of a million.

In any case, the situation in the Middle East is getting messier, with Iran in the background and Israel expanding its operations, that I decided it’s time to buy some upside calls in Crude.

On one hand, I’m not particularly bullish oil given the spare capacity sitting with OPEC.

On the other hand, Speculators (this is just a fancy term for “monkeys”) are the least long Oil they’ve been since 2011!!!

Therefore, if the geopolical situation intensifies, there could be fireworks in the oil price.

I usually prefer to own Oil producers but, in this case, I think Oil itself could be a better trade for the purpose I’m looking for.

Also, it’s not like Oil is at the highs: With WTI at $72, it’s a far cry from the $90s it traded in October.

Disclaimer:

This isn’t financial advice.

This is the trading blog of a shrub.

By now you should know: Don’t be Stupid.

Like, seriously … Don’t be stupid …