As oil prices rise, traders are increasingly seeking to hedge against the risk of falling oil prices. The most intuitive signal comes from the Brent crude oil risk reversal indicator, which has declined sharply. This means that the premium that investors pay for call options is narrowing compared to the same exercise price for put options, indicating that the options market believes that the risk of another sharp rise in oil prices has declined. It is worth noting that before oil prices rose in August and September, this indicator was the first to rise. Currently, the market is clearly still dominated by news, and the risk of supply shocks still exists. However, the risk balance is tilting towards the bearish side, and pressure on the spot market is showing — spot Brent crude oil is rising compared to futures, and continuing high oil prices are continuously suppressing demand.

Zhitongcaijing · 2d ago
As oil prices rise, traders are increasingly seeking to hedge against the risk of falling oil prices. The most intuitive signal comes from the Brent crude oil risk reversal indicator, which has declined sharply. This means that the premium that investors pay for call options is narrowing compared to the same exercise price for put options, indicating that the options market believes that the risk of another sharp rise in oil prices has declined. It is worth noting that before oil prices rose in August and September, this indicator was the first to rise. Currently, the market is clearly still dominated by news, and the risk of supply shocks still exists. However, the risk balance is tilting towards the bearish side, and pressure on the spot market is showing — spot Brent crude oil is rising compared to futures, and continuing high oil prices are continuously suppressing demand.