Traders insist on the options market with the escalation of geopolitical risks

The strikes that Israel launched against Iran and its reaction affected the markets on Friday, who urged the traders to chase to hedge options contracts, amid continuous questions about the possibility of this conflict. “The escalation between Israel and Iran, including strikes on core and military targets, is a turning point in the political geography of the Middle East, and its effects have already begun to reflect on the global markets,” said Thomash Fraga, an analyst of the PVM energy mediation company (PVM). He added that “the street of hormuz, through which 20 million barrels oil passes daily, is now on the edge of geopolitical danger.” Below are some ways traders prepare themselves to face the uncertainty that controls the markets: Oil: Transformed in the price curve in the days before the attack, and some analysts speculate that any blow prices can pay to be more than $ 100 a barrel. Traders rushed to the bullish buying options, and this pace increased a lot as the Israeli aircraft began bombing targets in Iran, after opening the markets in Asia Friday. The implicit fluctuations in the price of the Brent -Ru and the intermediate “West”, with a rate of 14%. The hysterical demand for the purchase options has increased the bullish tendency compensation to levels that have not been recorded since the Russian war against Ukraine in 2022, with the increase in demand after the Iranian retaliation strike. “The way speculators deal with is to buy all available buying options as quickly as possible, without considering what they pay,” says Robert Yuger, director of the Futures Futures section at Mizuho Securities USA. He added: “Not to mention some of them hedge against the open selling centers.” The consequences were not only limited to the immediate price, but also radically changed the form of the term curve within a few days, which affected millions of vessels from the “Western Texas” roll, which bet on the difference between the months of delivery. The form known as the ‘hockey stick’, which reflects the fear of oil glue, disappeared next year to be replaced by a falling structure as traders pay a bonus in exchange for immediate delivery. Open options contracts scored a new record on Friday, with the addition of approximately 38 million barrels centers during the week, through a wide range of implementation rates. Gold: A traditional haven that rises with an increase in tension. The rush is repeated in the direction of gold, which took place during customs duties in April, but on a smaller scale with escalating geopolitical tension. The trend of purchase options for one month has risen in the SPDR – GLD has increased to the highest level since April 16, while the metal approaches a new record. “Every time a geopolitical escalation occurs, investors are on their way to hedging tools such as gold,” says Phil Stripil, chief market analyst at Blue Line Futures. He added that investors could also be expanded to silver. Arrows: A limited fluctuation and a calculated reaction led the recent escalation in the Middle East tension to an expected effect in the market fluctuations markets, as one month contract for the CBOE volatility index index was a strong demand. However, market traders have made use of volatility, and movements related to political tensions disappear quickly as soon as the quiet speech begins. Despite the decline in the shares late Friday, the decrease in the S&B 500 index by more than 1% will not contribute much to reducing the contraction of the reached fluctuations, both on a daily basis or during the closing session. And as long as the markets remain, ‘the guide for handling crises’ remains, the profit through the exploitation of fluctuations can still disappoint the hope. “The geopolitical events usually create a sharp initial response that does not have a long -term effect unless there is a very specific reason,” says Ben Evert, the administrative partner and the KO chairman to invest in QVR advisers. He added: “The reaction of livestock fluctuations was not very large, and it will probably fade.” The US dollar: Limited movements despite the escalation, while the dollar scored its lowest level in three years Thursday, before the Federal Reserve’s decision on interest rates, as the options contract movements showed that this fall began to lose its momentum. The attacks did not cause this trend. The decline in a month has dropped a month on the ‘Bloomberg Instant Dollar’ index since the beginning of April, while the effects of the risk on Friday have been the lowest peeling since April 9. The return of geopolitical risks comes above the internal disorders in parts of the United States, as well as uncertainty about the impact of US economic and stories policy on growth. “The events that occurred during the night in the Middle East are shifting the attention of immigration protests in the United States, trade policies and commercial wars, and focuses on Trump’s tax law, which approves the Senate,” says Nikki Shels, head of MKS Pamp SA.