Futures News Oil 

U.S. shale firms miss out on $70 oil after hedging at $55

“The top 25 shale producers will forego about $1.7 billion in combined revenues in the second quarter with oil prices at about $70, according to Denver-based consultancy PetroNerds” writes Midwest Communications Inc for 95kqds.com. West Texas oil currently trades at a discount of $9 to U.S. benchmark futures, a spread that hit $12 earlier in the month.NEW YORK (Reuters) – Many top U.S. shale oil producers are missing out on the rally in oil prices to more than $70 a barrel – because they sold their oil through futures contracts…

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Markets News Stocks 

The 50 cent options trader who bets on market volatility says a financial ‘earthquake’ is coming

“And Ruffer says that if an “earthquake” does occur, “volatility will be a key issue in a market unwind.”” writes Business Insider Australia for businessinsider.com. That’s according to Ruffer LLP — the British asset manager that was revealed to be behind a series of trades last year betting on a rise in market volatility, via the purchase of 50 cent options contracts.Until February, asset managers could rely on a stable environment where stocks rose steadily.And the trades often expired worthless, as markets steadily rose amid an environment of record-low volatility. Source:…

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Markets News Stocks 

An unconventional hedge has been creating ‘turbo-charged’ returns for worried stock traders

“It’s just that the short FAANG stocks gave you better bang for your hedged buck.”” writes Joe Ciolli for businessinsider.com. While using single stocks as broader market hedges may seem like a novel concept to some, S3 Partners noticed it happening as far back as July 2017.Downside hedges have been a stock investor’s best friend over the past couple weeks as major US indexes have slipped to multi-month lows.If recent dynamics are any indication, traders are staying cautious, which is probably the right move considering one eye-popping statistic suggests tech…

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Markets News Stocks 

Stock market hedging as we know it is broken — but there’s a new way to protect against a meltdown

“But that relationship has broken down, derailing the strategy and leaving investors wondering how they can protect their hard-earned gains from a market meltdown” writes Joe Ciolli for businessinsider.com. Until recently, an investor looking to protect against stock declines could simply purchase long-term Treasurys or US dollar futures, the logic being that the assets traded inversely to one another.So with this all established, what’s the way forward for investors who want to hedge, but can’t go their normal route?. Deluard notes that when stocks are going up everyday, investors eschew…

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News Oil 

Oil down 2%, breaks five-week rally as oversupply fears resurface

“However, concerns linger about growing U.S. crude exports, due to a hefty WTI discount to Brent prices, which makes U.S. oil more competitive” reports foxbusiness.com. The prospect of extended oil production cuts by the Organization of the Petroleum Exporting Countries and other producers led by Russia had supported prices in recent sessions.Oil futures fell more than 2 percent on Friday, ending Brent crude’s longest multi-week rally in 16 months as oversupply concerns reappeared as producers have started hedging future drilling.Russia clarified remarks made by President Vladimir Putin about the oil…

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Crypto Markets News 

Bitcoin Price Watch; Hedging The Decline

“Looking the other way, if we see price break above resistance, we are going to enter a long trade towards 4075” writes unknown author for newsbtc.com. As we noted in this morning’s coverage, we were well overdue a near-term correction in the bitcoin price and so long as wider markets don’t panic and sell off their longer-term holdings in anticipation of a deeper decline, everything will be all right. Source: newsbtc.com Share This:

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News 

Automating Currency, Risk Management a Challenge for Corporate Treasurers

“Corporate treasurers are pursuing automation, but the complexity of their currency hedging and risk management requirements can be a barrier” writes Nina Trentmann Wsj for wsj.com. GE plans to further centralize its currency risk management during the second half of this year to provide the treasury department with more visibility. “It [the currency and risk management system] does not stand still,” Mr.Whereas the firm has centralized its currency hedging and its liquidity management, it struggles with doing the same with business risk. “Risk management is much harder to centralize,” Mr.Three…

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News 

UPDATE 1-MetLife changes hedging strategy after billions in losses

“All major financial companies use a type of derivative known as swaps to offset possible losses from changes in interest rates” reports businessinsider.com. MetLife’s derivatives losses largely pertain to its planned divestiture of a retail insurance business called Brighthouse Financial.MetLife’s painful derivatives positions are largely a result of positions it put in place to ensure Brighthouse would be financially strong from a capital perspective, and the spinoff would go smoothly.Operating profit beat analyst expectations, but included after-tax net losses of $602 million related to its derivatives portfolio in the first…

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Markets News Stocks 

A mystery trader called ’50 Cent’ has already lost $89 million, but can’t stop betting on a stock market shock

“It generally climbs as stocks fall, so purchases of VIX contracts translate to bearish wagers on the S&P 500” writes Joe Ciolli for businessinsider.com. Out of the $109 million the trader has spent this year buying the VIX, $89 million of that has expired worthless.To MRA, 50 Cent’s unwavering commitment to a VIX spike is a sign that hedging activity through the purchase of volatility is alive and well. Source: businessinsider.com Share This:

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News Oil 

Asia demand, hedging boosts trading in forward U.S. oil contracts

“NYMEX light sweet crude oil futures average daily volume hit an all-time high of 1.303 million contracts in November 2016, according to exchange data” reports businessinsider.com. Several WTI crude oil trading records have already been set in 2017, including the current daily open interest record of 2.24 million contracts on March 14.So far in 2017, WTI open interest and volume continue to exceed historic levels. Source: businessinsider.com Share This:

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