WTI squeeze theory gains ground
What flipped WTI so quickly and severely into backwardation?Increasingly, a consensus is forming that it was nothing more than a short squeeze. We’ve mentioned this before,...
WTI is no longer a burden to passive investors
It was quite a day on Monday for the WTI US oil benchmark. The structure of the futures curve finally flipped into a subtle backwardation, seeing the contract join Brent in a formation...
[Explaining backwardation] The WTI-Brent anomaly
… continued.How do you actually profit from a contango trade?To understand the WTI-Brent deviations of the last year, understanding the formation of the industry’s...
[Explaining backwardation] Are index funds the new swing producers?
FT Alphaville’s three-part series attempting to explain the current backwardation in the market……continued. Index funds the new swing producers?In many ways,...
[Explaining backwardation] The curious case of super-backwardation
A heads up — This is a three-part series attempting to explain the current backwardation in the market. We will make three arguments: 1) That contango trades helped to create...
Just when it makes sense to sit in oil futures…
… many funds have stopped buying. While at first that move might seem logical — they are obviously expressing a bearish view when it comes to future demand —...
Front Two Months of VIX Futures Slip Back Into Contango
For the first time since the end of July the front two months of the VIX futures are in contango, after spending 1 1/2 months in backwardation.While the degree of contango is very slight at the moment, this means that the short-term inverse VIX futures...
The Fed’s convenient WTI ‘Cushing’ factor
Since the Treasury yield curve is becoming less responsive to Fed intervention, we’ve outlined the case for why it might make sense for the Fed to start targeting the energy curve instead....
The Fed’s oil easing
This post is going to address two fundamental points:1) Why it might make sense for the Fed (or a respective government agent) to intervene in commodities.2) Whether the Fed...
VIX Backwardation Commentary
My recent VIX Term Structure Evolution Over Last Ten Days post seemed to draw a fair amount of interest from the Financial Times, Forbes and elsewhere, with some pundits claiming that the move from contango to backwardation in the VIX futures was fores...
VIX Term Structure Evolution Over Last Ten Days
If you think the last two weeks have turned the investing world upside down, well you have to look no farther than the VIX futures term structure to see just how accurate that view is. Two weeks ago the VIX was in the 17s and the VIX futures term struc...
