Source: Golden Ten Data

After Israel vowed to respond to Iran's missile and drone attacks, crude oil bullish option trading volume soared to a record high.

On Monday, Brent crude oil bullish options traded close to 350,000 shares, surpassing the record set in 2019. As Israel indicated its intention to fight back, the premium on these contracts over put options also rose to its highest level since October.

According to market sources, most of the deals focused on establishing new bullish positions and repositioning some existing contracts bought in the weeks prior to Iran's attack. There has been an increase in the number of open positions.

Traders are turning to the crude oil options market to ensure that they can bear the risk of rising oil prices as the conflict in the Middle East escalates and causes supply disruptions. With continued turmoil in the Middle East, combined with strong consumption and tight supply, Brent crude oil futures prices have risen to around $90 per barrel, a five-month high.

Some oil traders have even bought options contracts worth more than 3 million barrels, betting that continued rising geopolitical risks will push oil prices to soar to $250 per barrel by June.

According to data compiled by the agency, about 3,000 US crude oil futures with an execution price of 250 US dollars were traded in June on Tuesday, with a unit price of 1 cent.

Some traders and brokers say this is likely to be a “lottery” deal. If oil prices soar to an unprecedented level in the middle of next month, this “lottery ticket” could be won. However, this trade also appears to be accompanied by a put option with an execution price of $25, so it could also be a macro-strategy trade.

edit/lambor